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please explain the ABC Snowden Industries produces two electronic decoders, P and Q. Decoder Pis more sophisticated and requires more programming and testing than does
please explain the ABC Snowden Industries produces two electronic decoders, P and Q. Decoder Pis more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Cost Pool Activity Pools Total Cost Driver Repair and maintenance on assembly machine $128,800 Number of units produced Programming cost 167,200 Number of programming hours Software inspections 26,000 Number of inspections Product testing 38,000 Number of tests Total overhead cost $352,000 - Expected activity for each product follows: Decoder P Decoder o Total Number of Units 16,800 39,200 56,000 Number of Programming Hours 2,200 1,700 3,880 Number of Inspections 494 156 650 Number of Tests 1.400 1.100 2.500 Assume that before shitting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor dota pertaining to the two decoders follow: Direct Chbor Hours Decoder P 6,600 Decoder o 15,400 Total 22.000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC w UGLUUCH Decoder o Total 40,00 39,200 56,000 2,100 1,700 3,880 4 156 650 ,00 1,100 2,500 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow. Direct Labor Hours Decoder P 6,600 Decoder o 15,400 Total 22,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC Complete this question by entering your answers in the tabs below. Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. (Round intermediate calculations and final answers to 2 decimal places.) Cost per unit Decoder P Decoder a Method ABC Labor hours 6.29 6.20 Required A w
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