Please answer ALL requirements and show calculations.
E5-24 (final answer) Question Help Dandy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine-hours. Recently, the owners of Dandy Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Dandy Doors production for the most recent year follows: (Click the icon to view the production data.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. (Round the budgeted overhead rate to the nearest cent, round intermediary totals to the nearest whole dollar, and round your final per cost answers to the nearest cent.) Interior Exterior Total cost per unit using the simple cost system Data Table Interior Exterior $ 3,000 135 60 $ $ 1,600 235 80 2.45 Units sold Selling price Direct material cost per unit Direct manufacturing labor cost per hour Direct manufacturing labor-hours per unit Production runs Material moves Machine setups Machine-hours Number of inspections 155 4,000 6,000 250 170 Print Done * More Info The owners have heard of other companies in the industry that are now using an stem and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Dandy Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machin setup, assembly, inspection, and marketing. Dandy Doors collected the following data related to the indirect cost activities: 69 69 Activity Activity Cost Activity Cost Driver Production scheduling 75,050 Production runs Material handling 41,400 Material moves Machine setup $ 27,470 Machine setups Assembly $ 60,000 Machine-hours Inspection 18,900 Number of inspections Marketing costs were determined to be 2% of the sales revenue for each type of door. 69 Print Print Done Done 0 Requirements 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. 2. Calculate the cost of an interior door and an exterior door under an activity-based costing system. 3. Compare the costs of the doors in requirements 1 and 2 Why do the simple and activity-based costing systems differ in the cost of an interior and exterior door? 4. How might Dandy Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors? Print Done E5-24 (final answer) Question Help Dandy Doors, Inc., produces two types of doors, interior and exterior. The company's simple costing system has two direct cost categories (materials and labor) and one indirect cost pool. The simple costing system allocates indirect costs on the basis of machine-hours. Recently, the owners of Dandy Doors have been concerned about a decline in the market share for their interior doors, usually their biggest seller. Information related to Dandy Doors production for the most recent year follows: (Click the icon to view the production data.) (Click the icon to view additional information.) Read the requirements. Requirement 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. (Round the budgeted overhead rate to the nearest cent, round intermediary totals to the nearest whole dollar, and round your final per cost answers to the nearest cent.) Interior Exterior Total cost per unit using the simple cost system Data Table Interior Exterior $ 3,000 135 60 $ $ 1,600 235 80 2.45 Units sold Selling price Direct material cost per unit Direct manufacturing labor cost per hour Direct manufacturing labor-hours per unit Production runs Material moves Machine setups Machine-hours Number of inspections 155 4,000 6,000 250 170 Print Done * More Info The owners have heard of other companies in the industry that are now using an stem and are curious how an ABC system would affect their product costing decisions. After analyzing the indirect cost pool for Dandy Doors, the owners identify six activities as generating indirect costs: production scheduling, material handling, machin setup, assembly, inspection, and marketing. Dandy Doors collected the following data related to the indirect cost activities: 69 69 Activity Activity Cost Activity Cost Driver Production scheduling 75,050 Production runs Material handling 41,400 Material moves Machine setup $ 27,470 Machine setups Assembly $ 60,000 Machine-hours Inspection 18,900 Number of inspections Marketing costs were determined to be 2% of the sales revenue for each type of door. 69 Print Print Done Done 0 Requirements 1. Calculate the cost of an interior door and an exterior door under the existing simple costing system. 2. Calculate the cost of an interior door and an exterior door under an activity-based costing system. 3. Compare the costs of the doors in requirements 1 and 2 Why do the simple and activity-based costing systems differ in the cost of an interior and exterior door? 4. How might Dandy Doors, Inc., use the new cost information from its activity-based costing system to address the declining market share for interior doors? Print Done
