Question
Jones Company produces membrane and mechanical keyboards. Jones Company currently operates at capacity. The information below relates to the two types of keyboards Jones produces.
Jones Company produces membrane and mechanical keyboards. Jones Company currently operates at capacity. The information below relates to the two types of keyboards Jones produces. Membrane Mechanical Annual production in units 45,000 65,000 Direct material costs $79,000 $110,230 Direct labor costs $54,755 $62,745 Direct labor-hours 2,330 2,670 Machine hours 51,000 59,000 Number of production runs 68 76 Quality control-hours 1,100 1,300 Total manufacturing overhead costs are as follows: {:[" Manufacturing costs ",660","000],[" Setup costs ",180","000],[" Quality control costs ",123","000]:} (a) Jones had used a simple costing system based on direct labor hours. Calculate the cost of a membrane keyboard and a mechanical keyboard using this simple costing system.
B) Jones company wants to use activity based costing system. Choose a cost driver for each overhead pool. Identify.
C) calculate the MOH cost per unit for each product under an activity based costing system. Using drivers identified in part b.
D) compute the manufacturing costs per unit for each of the two keyboard types under an activity based costing system based on info from part b and c.
E) compare the costs of each keyboard in a and c what is the difference? What does this mean? Would you recommend Jones implement ABC
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