Answered step by step
Verified Expert Solution
Question
1 Approved Answer
need help please !! Puget World, Incorporated, manufactures two models of television sets, the N 800 XL model and the N 500 model. Data regarding
need help please !!
Puget World, Incorporated, manufactures two models of television sets, the N 800 XL model and the N 500 model. Data regarding the two products follow: Direct Labor- Hours per Unit 3.5 1.2 Total Direct Labor-Hours 15,750 15,000 30,750 Annual Production 4,500 units 12,500 units Model N 800 XL Model N 500 Additional information about the company follows: a. Model N 800 XL requires $60 in direct materials per unit, and Model N 500 requires $15. b. The direct labor wage rate is $19 per hour. c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products. d. Model N 800 XL is more complex to manufacture than Model N 500 and requires the use of special equipment. Consequently, the company is considering the use of activity-based costing to assign manufacturing overhead cost to products. Three activity cost pools have been identified as follows: Estimated Activity Cost Pool Activity Measure Overhead Cost Machine setups Number of setups $ 420,000 Special processing Machine-hours 195,000 General factory Direct labor-hours 1,230,000 $ 1,845,000 Expected Activity Model N 500 300 Activity Measure Number of setups Machine-hours Direct labor-hours Model N 800 XL 120 15,000 15,750 15,000 2. Assume that the company decides to use activity-based costing to assign manufacturing overhead cost to products. a(1) Compute the activity rate for each activity cost pool. al2). Determine the amount of overhead cost that would be assianed to each model Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started