Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Rounded Edge Squared Edge
Northwest Company produces two types of glass shelving: rounded edge and squared edge. The company reports the following cost data Rounded Edge Squared Edge Total Direct materials Direct labor Overhead (using plantwide rate) $ 31,200 12,200 36,600 $ 44,800 23.800 71,400 $ 76,000 36,000 108,000 Total product cost Units produced Product cost per unit $ 80.000 10,000 $8 $ 140,000 14,000 $ 10 $ 220,000 Northwest's controller wants to apply activity-based costing to allocate the $108,000 of overhead cost to the two products to see whether product cost per unit would change markedly from that above. The company's budgeted activity usage equals its actual activity usage for the period. The following additional information is collected Activity Purchasing Depreciation of machinery Setup ces 500 hours Budgeted Cost $ 5,400 56,600 46,000 $108,000 Activity Cost Driver Purchase orders Machine hours Setups Rounded Edge 109 orders 40 setups Activity Usage Squared Edge 431 orders 1,500 hours 210 setups Total 540 orders 2,000 hours 250 setups Total Required: 1. Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute the activity rate for each activity using activity-based costing. (Round "Activity rate" to 2 decimal places.) Budgeted Cost Budgeted Activity Usage Activity Rate Activity Purchasing Depreciation Setup mpute the activity rate for each activity using activity-based costing. ompute overhead cost per unit for each of the two products using activity-based costing etermine product cost per unit for each of the two products using activity-based costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Compute overhead cost per unit for each of the two products using activity-based costing. (Round "Activity Rate" to 2 decimal answers to the nearest whole dollar amount.) Overhead cost per unit-Rounded Edge Activity Activity Usage Purchasing Depreciation Setup Total allocated cost Units produced Overhead cost per unit Overhead cost per unit-Squared Edge Activity Purchasing Depreciation Setup Total allocated cost Units produced Overhead cost per unit Activity Rate Allocated Cost $ 0 Activity Usage Activity Rate Allocated Cost < Required 1 Required 3 > $ 0 0 0 ctivity Purchasing Budgeted Cost $ 5,400 Depreciation of machinery Setup 56,600 46,000 Machine hours Activity Cost Driver Purchase orders Rounded 109 or 500 hd Setups 40 se $ 108,000 Total equired: . Compute the activity rate for each activity using activity-based costing. 2. Compute overhead cost per unit for each of the two products using activity-based costing. 3. Determine product cost per unit for each of the two products using activity-based costing. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine product cost per unit for each of the two products using activity-based costing. (Do not round in Round your answers to 2 decimal places.) Per Unit Direct Materials Rounded Edge Squared Edge Direct Labor
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