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Need help with Required #2. Thanks! HW4: Ch.5 - Activity Based Costing Saved Help Save & Exit Submit Check my work 2 Maxey & Sons
Need help with Required #2. Thanks!
HW4: Ch.5 - Activity Based Costing Saved Help Save & Exit Submit Check my work 2 Maxey & Sons manufactures two types of storage cabinets-Type A and Type Band applies manufacturing overhead to all units at the rate of $128 per machine hour. Production information follows. 7.5 points Type B Anticipated volume (units) Direct-material cost per unit Direct-labor cost per unit Type A 25,600 $ 32 37 48,000 $ 48 37 eBook The controller, who is studying the use of activity-based costing, has determined that the firm's overhead can be identified with three activities: manufacturing setups, machine processing, and product shipping. Data on the number of setups, machine hours, and outgoing shipments, which are the activities' three respective cost drivers, follow. Print Type A 148 51,200 200 Setups Machine hours Outgoing shipments Type B 108 72,000 150 Total 256 123,200 350 . References The firm's total overhead of $15,769,600 is subdivided as follows: manufacturing setups, $3,440,640; machine processing, $9,461,760; and product shipping, $2,867,200. Required: 1. Compute the unit manufacturing cost of Type A and Type B storage cabinets by using the company's current overhead 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 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 $378.50 and the marketing manager is contemplating a $42 discount to stimulate volume. Is this discount advisable? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Required 4 Compute the unit manufacturing cost of Type A and Type B storage cabinets by using activity-based costing. (Round activity based application rates, overhead application and the final answers to 2 decimal places.) Type B Type A 364.00 Unit manufacturing costs Mc Graw Hill EducationStep by Step Solution
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