Question
Please show step by step the how you calculated the results Border Manufacturing produces two types of pre-fabricated exterior walls: deluxe and standard. The assignment
Please show step by step the how you calculated the results
Border Manufacturing produces two types of pre-fabricated exterior walls: deluxe and standard. The assignment basis for overhead costs has been direct labor hours. For 2021, Border compiled the following data for the two products:
| Deluxe | Standard |
Sales in units | 5,000 | 40,000 |
Sales price per unit | $13,000.00 | $9,500.00 |
Direct material and direct labor costs per unit | $3,600.00 | $2,600.00 |
Manufacturing overhead costs per unit | $ 1,800.00 | $2,400.00 |
Last year, Border purchased an expensive robotics system to allow for more complex products in the deluxe line. The CFO suggested that an ABC analysis could be valuable to help evaluate a product mix and promotion strategy for the next sales campaign, and obtained the following ABC information for 2021:
Activity | Cost Driver | Cost | Total | Deluxe | Standard |
Setups | # setups | $1,300,000 | 500 | 400 | 100 |
Machine-related | # of machine hours | $61,200,000 | 600,000 | 300,000 | 300,000 |
Packing | # shipments | $105,000,000 | 250,000 | 50,000 | 200,000 |
a)Using the current cost system, what is the estimated total cost of manufacturing one unit for the deluxe wall
$10,300
None of the above is correct.
$6,300
$5,400
b)Using the activity-based costing data presented above, what is the cost driver rate for the Setup overhead activity?
$8,300/setup
None of the above is correct.
$2,600/setup
$7,600/setup
c)Using the activity-based costing data presented above, what is the cost driver rate for the Packing overhead activity?
$420/shipment
None of the above is correct.
$540/shipment
$470/shipment
d)Using the activity-based costing data presented above, what is the revised manufacturing overhead cost per unit for the deluxe wall?
$3,697 per unit
$6,748 per unit
None of the above is correct.
$5,682 per unit
e) Using the activity-based costing data presented above, what is the cost driver rate for the Machine-related overhead activity?
$102/machine hour
$600/machine hour
None of the above is correct.
$56/machine hour
f)Using the activity-based costing data presented above, what is the revised total cost to manufacture one unit of the deluxe wall?
$6,453
$10,348
$8,682
$9,745
g)Using the current cost system, what is the estimated profit per unit for the deluxe wall?
None of the above is correct.
$10,300
$7,600
$5,400
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