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Plantwide versus Departmental Rates, Product-Costing Accuracy: Activity-Based Costing Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model
Plantwide versus Departmental Rates, Product-Costing Accuracy: Activity-Based Costing Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensiv than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: Product Data Model A Model B Units produced per year 10,000 100,000 Prime costs $152,000 $1,520,000 Direct labor hours 143,000 320,000 Machine hours 19,000 200,000 Production runs 50 50 Inspection hours 700 1,100 Maintenance hours 10,000 90,000 Overhead costs: Setup costs $270,000 Inspection costs 207,000 Machining 612,000 Maintenance 300,000 Total $1,389,000 Required: 1. Compute the overhead cost per unit for each product by using a plantwide rate based on direct labor hours. (Round to two decimal places.) Required: 1. Compute the overhead cost per unit for each product by using a plantwide rate based on direct labor hours. (Round to two decimal places.) Plantwide rate: $ per DLH. Model A: overhead cost per unit Model B: overhead cost per unit 2. Compute the overhead cost per unit for each product by using ABC. (Round rates and unit overhead costs to two decimal places.) Model A: overhead cost per unit Model B: overhead cost per unit Note: Be sure to complete both tables below. Activity Driver Activity Rate Setups Inspections Machining Maintenance Overhead assignment Model A Model B Setups Inspections Machining Check My Work 3 more Check My Work uses remaining. (Pre 2. Compute the overhead cost per unit for each product by using ABC. (Round rates and unit overhead costs to two decimal places.) Model A: overhead cost per unit Model B: overhead cost per unit Note: Be sure to complete both tables below. Activity Driver Activity Rate Setups per Inspections Machining Maintenance Overhead assignment Model A Model B Setups Inspections Machining Maintenance Total overhead Units produced Overhead per unit
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