Perdon Corporation manufactures safeslarge 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.

Mobile Safes

Walk-in Safes

Units planned for production20050Material moves per product line300200Purchase orders per product line450350Direct labor hours per product line8001,700

(a)

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Your answer is correct.

The total estimated manufacturing overhead was $272,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to:(Round answers to 2 decimal places, e.g. 12.25.)

(1)One mobile safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit(2)One walk-in safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit

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(b1)

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The total estimated manufacturing overhead of $272,000was comprised of $164,000for materials handling costs and $108,000for purchasing activity costs. Under activity-based costing (ABC):(Round answers to 2 decimal places, e.g. 12.25.)

What amount of materials handling costs are assigned to:

(a)One mobile safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit(b)One walk-in safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit

eTextbook and Media

Attempts: unlimited

(b2)

Correct answer icon

Your answer is correct.

The total estimated manufacturing overhead of $272,000was comprised of $164,000for materials handling costs and $108,000for purchasing activity costs. Under activity-based costing (ABC):(Round answers to 2 decimal places, e.g. 12.25.)

What amount of purchasing activity costs are assigned to:

(a)One mobile safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit(b)One walk-in safe$

enter a dollar amount per unit rounded to 2 decimal places

per unit

eTextbook and Media

Attempts: unlimited

(c)

Compare the amount of overhead allocated to one mobile safe and to one walk-in safe under the traditional costing approach versus under ABC.(Round answers to 2 decimal places, e.g. 12.25.)

Traditional Costing

Activity-Based Costing

Mobile safe$

enter a dollar amount rounded to 2 decimal places

$

enter a dollar amount rounded to 2 decimal places

Walk-in safe$

enter a dollar amount rounded to 2 decimal places

$

enter a dollar amount rounded to 2 decimal places