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Managerial Accounting: Please show all work and explain each step. Problem 3.1 for Self-Study Compute Product Costs Using Activity-Based Costing. The following information is available
Managerial Accounting: Please show all work and explain each step.
Problem 3.1 for Self-Study Compute Product Costs Using Activity-Based Costing. The following information is available for the month of December for the Ciudad Juarez factory: Mountain bikes produced 600 Racing bikes produced 200 Cost Driver Units Activities Mountain Bikes Racing Bikes Purchasing materials 600 frames 200 frames Machine setups 7 setups 24 setups Inspections 100 hours 200 hours 800 hours Running machines 600 hours Compute the costs (1) in total and (2) per unit for both products using the activity-based costing rates. Use the actual cost driver units for December given in this self-study problem and the rates presented in the text. For mountain and racing bikes, respectively, assume the direct materials costs are $100 and $200 per unit and direct labor costs are $30 and $60 per unit. Round unit costs to the nearest dollar. Recall that overhead allocated to products equals the cost driver rate (for example, $20 per frame for materials handled according to the schedule of rates in Exhibit 3.4) times the cost driver units (for example, 600 frames for mountain bikes in December) Rate (Column 3/Column 4) $20 per frame $2,000 per setup $100 per hour $30 per hourStep by Step Solution
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