lack Corporation has the following ost pools: predicted indirect costs and cost drivers 2018 18 te givell deuoll Finishing Department Cost Driver Maintenance Materials handling Machine setups Inspections Fabrication Department $65,000 30,000 70,000 $55,000 Machine hours 15,000 Material moves 5,000 Machine setups 25,000 Inspection hours $165,000 $100,000 The following activity predictions were also made for the year: Machine hours Material moves Machine setups Inspection hours Fabrication Department Finishing Department 5,000 1,500 50 1,000 10,000 3,000 700 It is assumed that the cost per unit of activity for a given activity does not vary between departments. Slack's president, Charles Slack, is trying to evaluate the company's product mix strategy regarding two of its five product models, ZX300 and SL500. The company has been using a company-wide overhead rate based on machine hours but is considering switching to either department rates or activity-based rates The production manager has provided the following data for the production of a batch of 100 units for each of these models ZX300 SL500 Direct materials cost17000 23,000 5,000 $4,000 Direct labor cost Direct materials cost Direct labor cost Machine hours (Fabrication) Machine hours (Finishing) Materials moves Machine setups Inspection hours ZX300 SL500 $17,000 $23,000 $5,000 $4,000 700 100 50 500 200 30 30 60 a. Determine the cost of one unit each of ZX300 and SL500, assuming a company-wide overhead rate is used based on total machine hours. Round rate to two decimal places Overhead rate based on total machine hours 17.67per machine hour Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places. Product Costs per Unit ZX300 SL500 s 1700023,000 4,000 Direct materials Direct labor 5,000 12,367x Manufacturing overhead Total cost per batch34,367 Number of units per batch 14,133 x 41,133X 100 100 Cost per unit S 34367 xs 411.33 x b. Determine the cost of one unit of ZX300 and SL500, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments. b. Determine the cost of one unit of ZX300 and SL500, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments Round rate to two decimal places, if applicable. Overhead rate based on machine hours for Fabrication Dept. $ 12,367 x per machine hour Overhead rate based on machine hours for Finishing Dept. $ 14,133 x per machine hour Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. Product Costs per Unit Product Costs per Unit ZX300 SL500 Direct materials 17,000 v 23,000 Direct labor 5,000 4,000 Manufacturing overhead: Fabrication Dept Finishing Dept Total cost per batch 8,250 4,000 30,250x 4 11,550 2000 40,550 100 302.5 X405.5 Number of units per batch 100 Cost per unit c.Determine the cost of one unit of ZX300 and SL500, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities. Round rate to two decimal places, if applicable. Activity-based overhead rates: Maintenance 8 per machine hour Materials handling Machine setup Inspection activities 10 per materials move 100 per machine setup 25 Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. Product Costs per Unit ZX300 17000 S 23,000 5,000 SL500 Direct materials Direct labor 4000 Maintenance activity Materials handling activity Machine setups activity 5,600 300 500 750 6,400 500 900 1,500 29,150-/ S 36,300 100 297.5 363 Inspections activity Total cost per batch Number of units per batch 100 Cost per unit
