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1 The Hitt/Kingston Corporation produces three produc Direct Labor: Manufacturing Overhead: $1,850,000 esti $20 per Number of units to be produced Number of machine hours expected to be used Number of direct labor hours expected to be used Part 1: calculate the total cost of producing each p the average cost per unit allocating MOH as deser Total Direct Materials Used Total Direct Labor Cost Allocated amount of MOH applied using direct labo as the factory-wide cost driver Tota Average cost per un Part 2: calculate the total cost of producing each p and the average cost per unit allocating MOH as d Total Direct Materials Used Total Direct Labor Cost Allocated amount of MOH applied using machine hc as the factory-wide cost driver Tota Average cost per un Part 3: You decide to see if using activity-based co Calculate the towing each product an IBC Costing) 2 produces three products: Product X, Product Y and Pro $20 per hour is the estimated direct labe $1,850,000 estimated total cost ted to be used pected to be used 30. 2." 20. of producing each product and ating MOH as described below. $1,1 $4 ied using direct labor hours ost driver Total Cost Average cost per unit of producing each product allocating MOH as described below. $1,1 S4 ied using machine hours ost driver Total Cost Average cost per unit ing activity-based costing will provide a different, pe cing each producest per unit alloca 3 Use cell references/formulas in highlig Y and Product z. direct labor cost. X 30,000 2.700 20,000 Products Y 20,000 3,200 7,500 Z 10,000 2,200 3,000 $1,100,000 $400,000 $480,000 $150,000 $325,000 $60,000 [ [ $1,100,000 $400,000 $480,000 $150,000 $325,000 560,000 [ [ fferent, perhaps more accurate result for the average co mit allocating MOA as described helow hlighted cells Total 60,000 8,100 30,500 Hint: First - calculate th $1,905,000 $610,000 Overhead appl $1,905,000 $610,000 Overhead app! cost of producingmolnit. det. 5 Hint: First-calculate the overhead application rate(s) Overhead application rate using DL hours. Overhead application rate using Machine hour product. Average cost per unit Part 3: You decide to see if using activity-based costi Calculate the total cost of producing each product and You get the following information about the overhead Activity Cost driver Produ Setup of machines # of setups Drilling # of machine hours Assembly # of direct labor hours Inspection # of inspections sil Total Direct Materials Used Total Direct Labor Cost Allocated MOH: Setup of machines Drilling Assembly Inspection Total Allocated MOH 1 Total Costs 1 Average Cost per unit Part 4: Assume your company decided to Using direct labor hours to alloca Did your company choose the best approach Answer: t per unit ased costing will provide a different, perhaps more ac duct and the average cost per unit allocating MOH as de verhead costs: Estimated amount of cost driver used for Product X Product Y Product Z 120 2,700 20000 80 3,200 7500 30 50 2.200 3000 20 50 $1,100,000 $400,000 $480,000 $150,000 $325,000 $60,000 decided to use direct labor hours as the cost driver to all s to allocate overhead means that your company decided approach to allocate manufacturing overhead costs to 8 ccurate result for the average cost of producing each described below Total Estimated Amount of Overhead 250 8100 30500 100 $300,000 $910,000 $425,000 $215,000 $1,850,000 $1,905,000 $610,000 DON allocate manufacturing overhead costs to units produced not to use machine hours (part 2) or activity-based costi determine total costs and cost per unit? Why or why n Overhead application rate using Machine hours. 9 Overhead application rate for machine setup Overhead application rate for drilling Overhead appliation rate for assembly Overhead application rate for inspection .. t paragraph to explain