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Neylon Company produces mathematical and financial calculators and operates at capacity. Data related to the two products follows. E: (Click the icon to view the
Neylon Company produces mathematical and financial calculators and operates at capacity. Data related to the two products follows. E: (Click the icon to view the data.) Total manufacturing overhead costs are: (Click the icon to view the overhead costs.) Requirements 1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. 2. Compute the manufacturing cost per unit for each product. 3. How might Neylon's managers use the new cost information from its activity-based costing system to better manage its business? ... Requirement 1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. Begin by choosing a cost driver for each overhead cost pool. - Cost driver Rate Data Table Activity Machining Set up Inspection Financial Mathematical 25,000 Determine the formula to calculate the overhead allocated to each product Annual production in units Direct materials cost $ 50,000 $ 75,000 150,000 37,500 Overhead allocated to product S 12,500 $ 2,500 Now calculate the total overhead allocated to each product and the overhead cost per unit. (Round your answer to the nearest cent.) Direct manufacturing labor cost Direct manufacturing labor-hours Machine-hours Number of production runs Inspection hours 2,500 20.000 50 40,000 Mathematical Financial 50 Machining costs Setup costs 1,200 600 Inspection costs Total overhead costs Print Done Manufacturing overhead cost per unit Requirement 2. Compute the manufacturing cost per unit for each product. Determine the formula to calculate the direct costs per unit. Direct cost per unit Data Table Now compute the manufacturing cost per unit for each product. Mathematical Financial Total $ 420,000 Machining costs Setup costs Inspection costs 130,000 135,000 Manufacturing cost per unit Requirement 3. How might Neylon's managers use the new cost information from its activity-based costing system to better manage its business? (Select all that apply.) Print Done A. Managers can use this information to devise employee compensation packages. B. Managers can use this information to improve advertising campaigns and their public image I C. Managers can use this information for design decisions, and to plan and manage activities. D. Managers can use this information for pricing and product-mix decisions, and for cost reduction and process-improvement decisions
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