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No explanation necessary Due Co. manufactures two bicycles, the Mountain Bike and the Street Racer, and anticipates producing 8,000 Mountain Bikes and 4,000 Street Racers.
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Due Co. manufactures two bicycles, the Mountain Bike and the Street Racer, and anticipates producing 8,000 Mountain Bikes and 4,000 Street Racers. The direct material cost and direct labor cost for each bike are: Direct Materials Direct Labor $120 $240 Mountain Bike Street Racer $60 $160 Due's budgeted overhead cost of $2,140,000 is based on the following: Set-up procedures $400,000 Assembling stations $1,200,000 Finishing $ 240,000 Shipping $ 300,000 The following activities are needed to manufacture the bikes: Set-up Procedures Assembling Stations Mountain Bike 6,000 12,000 Finishing 8,000 4,000 Shipping 4,000 2,000 Street Racer 4,000 8,000 27. What is the total cost per bike of the Mountain Bike? 28.If Due uses traditional costing-compared to activity-based costing - would the Mountain Bike be over-costed or under-costed? 29. Refer to the previous question. By what amount, if any, would the Mountain Bike per unit cost be over-costed or under-costed? 30.Refer to the previous question. By what amount, if any, would the entire Mountain Bike product line be over-costed or under-costed? Due Co. manufactures two bicycles, the Mountain Bike and the Street Racer, and anticipates producing 8,000 Mountain Bikes and 4,000 Street Racers. The direct material cost and direct labor cost for each bike are: Direct Materials Direct Labor $120 $240 Mountain Bike Street Racer $60 $160 Due's budgeted overhead cost of $2,140,000 is based on the following: Set-up procedures $400,000 Assembling stations $1,200,000 Finishing $ 240,000 Shipping $ 300,000 The following activities are needed to manufacture the bikes: Set-up Procedures Assembling Stations Mountain Bike 6,000 12,000 Finishing 8,000 4,000 Shipping 4,000 2,000 Street Racer 4,000 8,000 27. What is the total cost per bike of the Mountain Bike? 28.If Due uses traditional costing-compared to activity-based costing - would the Mountain Bike be over-costed or under-costed? 29. Refer to the previous question. By what amount, if any, would the Mountain Bike per unit cost be over-costed or under-costed? 30.Refer to the previous question. By what amount, if any, would the entire Mountain Bike product line be over-costed or under-costedStep by Step Solution
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