Question
Leue, Inc. makes two kinds of baseball gloves - the Beginner and the Pro. Below is some relevant information for the past year (unit means
Leue, Inc. makes two kinds of baseball gloves - the Beginner and the Pro. Below is some relevant information for the past year (unit means one baseball glove):
Beginner | Pro | |||
Number of units sold | 65,000 | 10,000 | ||
Sales price per unit | $65 | $100 | ||
Direct materials per unit | $10 | $20 | ||
Direct labor dollars per unit | $30 | $45 | ||
Cutting machine-hours per unit | 0.50 | 1.00 | ||
Direct labor-hours per unit | 2.00 | 3.00 |
Little League is considering the use of activity-based costing, although it currently uses traditional (simple) costing, (meaning it uses just one pool of overhead costs and one allocation base). Little League is doing some analysis at year-end to see which costing method is best. Little League incurred total overhead costs for the year of $615,000, with direct labor-hours as the only allocation base.
Using traditional costing, what is the total cost (direct materials, direct labor and indirect costs) of each Pro baseball glove?
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Mathematical Applications for the Management Life and Social Sciences
Authors: Ronald J. Harshbarger, James J. Reynolds
11th edition
9781337032247, 9781305465183, 1305108043, 1337032247, 1305465180, 978-1305108042
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