Question
Jay Krue makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells
Jay Krue makes two products, Simple and Complex. As their names suggest, Simple is the more basic product, and Complex comes with all the bells and whistles. The company has always allocated overhead costs to products based on machine hours. Last year, the company implemented an activity-based costing system, and managers determined the following activity pools and rates based on total overhead of $1,527,200: Rate Assembly $1.25 per direct labor hour Fabrication $9.75 per machine hour Setups $18 per batch Bonding $179,300 direct to Complex Only the Complex product requires bonding, so all the costs of bonding should be allocated to Complex. The following data relate to both products. Simple Complex Units produced 126,000 45,000 Direct labor hours 230,000 103,000 Machine hours 50,000 33,000 Batches 2,800 4,000 Using the traditional method of allocating overhead costs, allocate overhead cost to the products. show that the overhead assigned to each product sums to the total company overhead. determine the overhead cost per unit for each product. (Round per unit answers to 2 decimal places, e.g. 15.25.) Simple Complex Total Machine hours Overhead rate $ $ Total overhead to product $ $ $ Simple Complex Total overhead to product $ $ Number of units produced Overhead per unit $ $ LINK TO TEXT Using the activity-based costing rates, allocate overhead cost to the products. show that the overhead assigned to each product sums to the total company overhead. determine the overhead cost per unit for each product. (Round per unit answers to 2 decimal places, e.g. 15.25) Simple Complex Total Assembly $ $ Fabrication Setups Bonding Total overhead $ $ $ Simple Complex Total overhead to product $ $ Number of units produced Overhead per unit $ $
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