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I need help with a question. Due before Midnight! Accounting. Problem 3 25 points Activity based costing Beeline Manufacturing produces two types of industrial ventilation
I need help with a question. Due before Midnight! Accounting.
Problem 3 25 points Activity based costing Beeline Manufacturing produces two types of industrial ventilation machines: heavy-duty and standard. The allocation basis for overhead costs has always been direct labor hours. For 2014, Beeline compiled the following data for the two products: Heavy-duty Standard Sales in units 4,000 45,000 Sales price per unit $12,000.00 $9,900.00 Direct material and direct labor costs per unit $3,900.00 $3,100.00 Allocated manufacturing overhead costs per unit $ 1,950.00 $2,350.00 Last year, Beeline purchased an expensive robotics system to allow for more complex products in the heavy-duty line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign. She obtained the following ABC information for 2014: Activity Setups Machine-related Packing Cost Driver # setups # of machine hours # shipments Cost $ 1,200,000 $ 59,800,000 $ 104,550,000 Total Heavy-duty Standard 500 410 90 500,000 250,000 250,000 255,000 45,000 210,000 3.1. Using the current cost system based on direct labor hours, what is the estimated total cost of manufacturing one unit for each type of ventilation machine? Heavy-duty Standard ___________________ ___________________ 3.2. Using the current cost system based on direct labor hours, what is the estimated profit per unit for each type of machine? Heavy-duty Standard 1 ___________________ ___________________ 3.3. Using the activity-based costing data presented above, compute the cost driver rate for each overhead activity. Setup ________________ Machine-related________________ Packing ________________ 3.4. Using ABC, compute the revised manufacturing overhead cost per unit for the heavy-duty machine. Answer ___________________ 3.5. Compute the revised total cost to manufacture one unit of the heavy-duty machine. Answer ___________________ 3.6. Compute the revised profit on one unit of the heavy-duty machine. Answer ___________________ 2Step by Step Solution
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