Question
Part 1: Red River Company produces tee products with the following production and cost information: Model X Model Y Model Z Units produced 35,000
Part 1: Red River Company produces tee products with the following production and cost information: Model X Model Y Model Z Units produced 35,000 75,000 125,000 Direct labor hours (total) 40,000 20,000 40,000 Number of setups 120 180 350 Number of shipments 55 50 45 Number of inspections 50 150 100 Overhead information includes Setups Shipping Quality Total Required: Cost Driver $ 310,000 number of setups 280,000 number of shipments $ 800,000 1,390,000 number of inspections Determine the amount of overhead that would be assigned to each unit of all three products using activity- based costing. Part 2: Alpine Canning Company processes tomatoes into catsup, tomato juice, and canned tomatoes. During the summer, the joint costs of processing the tomatoes were $480,000. There was no beginning or ending inventories for the summer. Production and sales value information for the summer were as follows: Product Ketchup Cases Additional costs Per Case Selling Price Per case 110,000 3.25 32.00 Juice 175,000 6.50 28.00 Canned 220,000 2.75 15.00 Required: a. Determine the amount allocated to each product if the estimated net realizable value method is used. b. Determine the amount allocated to each product if the physical units method is used.
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