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In a normal year, Maroone Inc normally runs about 20,000 direct labor hours. In 2017 the company identified the following overhead costs and activity drivers

In a normal year, Maroone Inc normally runs about 20,000 direct labor hours. In 2017 the company identified the following overhead costs and activity drivers for the year 2018. After production began in 2018, the company made two products. Details of those are below...
Overhead Item Expected in 2018 Model SS Model TT
Setup Costs $150,000 Direct Materials $2,250 $2,500
Ordering costs $40,000 Direct labor $3,000 $1,875
Maintenance $200,000 Units completed 375 300
Power $20,000 DLHs 90 110
Kilowatt hrs 100,000 # of setups 6 8
Machine hrs 16,000 # of orders 8 15
# of orders 10,000 Machine hrs 180 150
# of setups 1,200 Kilowatt hrs 90 120
Hours per unit
SS 0.24

1. Determine the unit cost for each job using direct labor hours to apply overhead.

TT 0.37

a. determine the predetermined rate

$20.50 per hour

b. apply the rate to the two products

Model SS: $1,845.00 Model TT: $2,255.00 overhead per unit

c. calculate total unit cost of each product

Model SS: $18.92 Model TT: $22.10 ss $4.92
tt $7.52

2. Determine the unit cost for each job using the 4 activity drivers (round amounts to 2 decimal places).

a. determine the 4 activity rates

b. apply the rates to the two products

c. calculate total unit cost of each product

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