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Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of
Perdon Corporation manufactures safes-large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Perdon is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be allocated to each product line. The information shown below relates to overhead. Activity Cost Pools and Drivers Activity Mobile Safes Walk-in Safes Units Planned for Production 200 50 Material Moves per Product Line 300 200 Purchase Orders per Product Line 450 350 Direct Labor Hours per Product Line 800 1,700 The total estimated manufacturing overhead was $264,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to one mobile safe and one walk- in safe? Hint: Calculate predetermined overhead rate using the traditional costing method. Then, calculate cost allocated to each safe type and then divide the cost by the number of units planned for production. . Round answers to 2 decimal places, e.g. 12.25. . When typing your responses, do NOT include a dollar sign. For example, if your answer is $10,000, you should be typing 10,000 or 10,000.00 without any dollar sign. Responses - Unit Costs One Mobile Safe $ per unit One Walk-in Safe $ per unitCompute the overhead rates using the activity-based costing approach. . When typing your responses, do NOT include a dollar sign. For example, if your answer is $10,000, you should be typing 10,000 or 10,000.00 without any dollar sign. Response - Overhead Rate Machining $ per Machine Hour Machine Setup $ per Setup Hour Determine the difference (in costs) in allocation between the two approaches. . Round answer to the nearest dollar. IF your calculation is $10.01, enter 10. . When typing your responses, do NOT include a dollar sign. For example, if your answer is $10,000, you should be typing 10,000 or 10,000.00 without any dollar sign. Traditional Costing Standard tA Custom LA Activity-Based Costing Standard Custom
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