Now, calculate activity rate based on each overhead activity Activity and Measures Estimated Overhead Cost Total Activity Rate Labor-related (DLH) Machine-related (MH) Machine setups (setups) Production orders (orders) Parts Admin (Part types) General factory (MH) $ $ $ $ $ $ 800,000.00 2,100,000.00 1,600,000.00 3,150,000.00 350,000.00 2,000,000.00 Expected Activity Phone GPS 800,000.00 500,000.00 300,000.00 1,000,000.00 300,000.00 700,000.00 4,000.00 3,000.00 1,000.00 1,200.00 800.00 400.00 700.00 400.00 300.00 1,000,000.00 300,000.00 700,000.00 Total Estimated Overhead $ 10,000,000.00 Now calculate overhead cost per unit for both phone and GPS Activity and Measures Estimated Overhead Cost Total GPS Labor-related (DLH) Machine-related (MH) Machine setups (setups) Production orders (orders) Parts Admin (Part types) General factory (MH) $ $ $ $ $ $ 800,000.00 2,100,000.00 1,600,000.00 3,150,000.00 350,000.00 2,000,000.00 Expected Activity Phone GPS 800,000.00 500,000.00 300,000.00 1,000,000.00 300,000.00 700,000.00 4,000.00 3,000.00 1,000.00 1,200.00 800.00 400.00 700.00 400.00 300.00 1,000,000.00 300,000.00 700,000.00 Activity Rate Phone $ $ $ $ $ $ 10,000,000.00 Total Estimated Overhead Total overhead cost assigned Number of units produced Overhead cost per unit Based on Activity Based Costing system, what is the unit product cost for Phone and GPS? Phone GPS Direct Materials Direct Labor Manufacturing Overhead Unit Product Cost Comtek, Inc., makes two products: GPS systems and Phone systems. For the current year, Comtek plans to produce 500,000 phone units and 300,000 GPS units. Comtek's traditional cost system applies manufacturing overhead to products based on direct labor-hours (Job-Order Costing). Both products require one direct labor-hours to complete 1 unit. Assume unit costs for materials and labor are as follow: Phone Units Direct Material Direct Labor GPS Units 90.00 $ 20.00 $ 50.00 20.00 Total manufacturing overhead costs for the current year are estimated to be $10,000,000. The company develops the following overhead rate based upon direct labor-hours: POHR Per Direct Labor Hour Based on Job order costing system, what is the unit product cost for Phone and GPS? Phone GPS Direct Materials Direct Labor Manufacturing Overhead Unit Product Cost Now Comteck, Inc., decide to switch to Activity-Based Costing, the $10,000,000 estimated overhead got break down into the follwing activities: Activity and Measures Estimated Overhead Cost Total Labor-related (DLH) Machine-related (MH) Machine setups (setups) Production orders (orders) Parts Admin (Part types) General factory (MH) $ $ $ $ $ $ 800,000.00 2,100,000.00 1,600,000.00 3,150,000.00 350,000.00 2,000,000.00 Expected Activity Phone GPS 800,000.00 500,000.00 300,000.00 1,000,000.00 300,000.00 700,000.00 4,000.00 3,000.00 1,000.00 1,200.00 800.00 400.00 700.00 400.00 300.00 1,000,000.00 300,000.00 700,000.00 Total Estimated Overhead $ 10,000,000.00
