Question
Part 271 Part 342 Production 500,000 100,000 Selling Price $31.86 $24.00 Prime costs per unit $9.53 $8.26 Number of production runs 100 200 Receiving orders
Part 271 | Part 342 | |
Production | 500,000 | 100,000 |
Selling Price | $31.86 | $24.00 |
Prime costs per unit | $9.53 | $8.26 |
Number of production runs | 100 | 200 |
Receiving orders | 400 | 1,000 |
Machine hours | 125,000 | 60,000 |
Direct labor hours | 250,000 | 22,500 |
Engineering hours | 5,000 | 5,000 |
Material moves | 500 | 400 |
Overhead is allocated using a plant-wide rage based on direct labor hours.
Overhead Cost Pools |
| ||
Setup costs | $240,000 | ||
Material handling costs | $900,000 | ||
Machine costs | $1,750,000 | ||
Receiving costs | $2,100,000 | ||
Engineering costs | $1,500,000 | ||
General plant costs | $500,000 | ||
Total | $6,990,000
| ||
Part 3: Compute overhead and gross margin using Activity-based costing. | |||
Per unit | Part 271 | Part 342 |
|
Overhead | $ | $ |
|
Gross Margin: |
| ||
Selling Price | $ | $ |
|
Prime costs | $ | $ |
|
Overhead | $ | $ |
|
Gross margin | $ | $ |
|
Total Profit | $ | $ |
|
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