Question
Please help me with the questions below Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having
Please help me with the questions below
Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product K-7. Product L-15 is the more complex of the two products, requiring 2 hours of direct labor time per unit to manufacture compared to 1 hour of direct labor time for Product K-7. Product L-15 is produced on an automated production line. |
Unit costs for materials and labor are: |
Product K-7 | Product L-15 | |||
Direct material | $ | 12 | $ | 29 |
Direct labor | $ | 7 | $ | 20 |
|
Required: |
a-1 | Compute the predetermined overhead rate under the current method. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the "$" sign in your response.) |
Predetermined overhead rate | $ |
a-2 | Determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) |
Unit Product Cost | |
Product K-7 | $ |
Product L-15 | $ |
|
b. | The company is considering the use of activity-based costing as an alternative to its traditional costing method for manufacturing overhead. Data relating to the company's activity cost pools for the current year are given below: |
Total Cost | Product K-7 | Product L-15 | Total | ||
Machine setups required | $ | 255,000 | 900 | 1,650 | 2,550 |
Purchase orders issued | 54,677 | 565 | 184 | 749 | |
Machine-hours required | 163,620 | 7,410 | 10,770 | 18,180 | |
Maintenance requests issued | 186,676 | 721 | 861 | 1,582 | |
| | ||||
$ | 659,973 | ||||
| | ||||
|
Using the data above, determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the "$" sign in your response.) |
Product K-7 | Product L-15 | |||
Direct materials | $ | $ | ||
Direct labour | ||||
Manufacturing overhead | ||||
Total unit product cost | $ | $ | ||
| | |||
|
Show the working please
thank you
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