Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

I need this question as well within less than hour. there are some more if you are done early Thank you Weston Corporation manufactures a

I need this question as well within less than hour. there are some more if you are done early

Thank you

image text in transcribed Weston Corporation manufactures a product that is available in both a deluxe and a regular model. The company has made the regular model for years; the deluxe model was introduced several years ago to tap a new segment of the market. Since introduction of the deluxe model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the deluxe model have been increasing rapidly. Overhead is applied to products on the basis of direct labor-hours. At the beginning of the current year, management estimated that $4,600,000 in overhead costs would be incurred and the company would produce and sell 10,000 units of the deluxe model and 60,000 units of the regular model. The deluxe model requires 2.5 hours of direct labor time per unit, and the regular model requires 1.5 hour. Materials and labor costs per unit are given below: Direct materials cost per unit Direct labor cost per unit Deluxe $60.00 $40.00 Regular $40.00 $20.00 Required: 1-a. Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. 1-b. Compute the unit product cost for one unit of each model. 2. An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows: Expected Activity Estimated Overhead Cost Activity Cost Pool and Activity Measure Purchase orders (number of orders) $ Rework requests (number of requests) Product testing (number of tests) Machine related (machine-hours) $ Compute the activity rate for each of the activity cost pools. Deluxe Regular Total 60,000 400 850 1,250 330,000 290,000 3,920,000 700 8,000 4,000 1,500 3,600 13,500 2,200 11,600 17,500 4,600,000 3. Assume that actual activity is as expected for the year. Using activity-based costing, do the following: a. Determine the total amount of overhead that would be applied to each model for the year. b. Compute the unit product cost for one unit of each model. (Do not round intermediate calculations. Round your final answers to 2 decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial Accounting

Authors: Robert Libby, Patricia Libby, Frank Hodge

10th edition

1259964949, 1259964947, 978-1259964947

More Books

Students also viewed these Accounting questions

Question

Population

Answered: 1 week ago

Question

The feeling of boredom.

Answered: 1 week ago