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Maxey & Sons manufactures two types of storage cabinets -Type A and Type B-and applies manufacturing cremead to al unts at the rate of $136
Maxey \& Sons manufactures two types of storage cabinets -Type A and Type B-and applies manufacturing cremead to al unts at the rate of $136 per machine hour. Production information follows. The controller, who is studying the use of activity-based costing, has determined that the firms overhead can be identefed with threo. activities: manufacturing setups, machine processing. and product shipping Date on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivern, follow: The firm's total overhead of $17,802,400 is sabdivided as follows: manufacturing setups, $3,884,160, machine processing, $10,68t,440. and product shipping, \$3,236,800. Required: 1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the company's cuerent overhesed costing procedures. 2. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. 3. Is the cost of the Typo A storage cabinet overstated or understated (te, distorted by the use of machine hours to allocmetetal manufacturing overhead to production? By how much? 4. Assume that the current seiling price of a Tvpe A storage cabinet is $398.00 and the marketing manager is contemplating a $44 4. Compute the unt manuractuning cost of iype A and iype u storage caoinets by using activity-based costing 3. Is the cost of the Type A storage cabinet overstated or understated (i.e., distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much? 4. Assume that the current selling price of a Type A storage cabinet is $398.00 and the marketing manager is contemplating a 544 discount to stimulate volume. Is this discount advisable? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. (Reund activity based application rates, overhead application and the final answers to 2 decimal places.) 2. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. 3. Is the cost of the Type A storage cabinet overstated or understated (i.e. distorted) by the use of machine hours to allocate total manufacturing overhead to production? By how much? 4. Assume that the current selling price of a Type A storage cabinet is $398.00 and the marketing manager is contemplating a $44 discount to stimulote volume. Is this discount advisable? Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Is the cost of the Type A storage cabinet overstated or understated (l.e., distorted) by the wse of machine hours to allocate total manufacturing overhead to production? By how much? (Do not round intermediate calrulations, Reund activity based application rates, overhead application and the final anseers to 2 decimal piaces)
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