Precision Manufacturing Inc. (PMI) makes two types of industrial component partsthe EX300 and the TX500. It annually produces 53,000 units of EX300 and 11,800 units of TX500. The companys conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional information relating to the companys two product lines is shown below:
Precision Manufacturing Inc. (PM) makes two types of Industrial component partsthe EX300 and the TX500. It annually produces 53,000 units of EX300 and 11,800 units of TX500. The company's conventional cost system allocates manufacturing overhead to products using a plantwide overhead rate and direct labor dollars as the allocation base. Additional Information relating to the company's two product lines is shown below. EX300 TX500 Total Direct material: $359, 325 $155, 550 $514, 875 Direct labor $113,000 $ 39,000 $152,000 The company is considering implementing an activity-based costing system that distributes all of its manufacturing overhead to four activities as shown below. Activity Activity Cost Pool (and Activity Measure) Machining machine-hours) Setups (setup hours) Product-level (number of products) General factory (direct labor dollars) Total manufacturing overhead cost Manufacturing Overhead $170,400 89, 100 77,940 42,560 $ 280,000 EX300 83,000 40 1 $113,000 TX500 59.000 220 1 $39.000 Total 142,000 270 $152,000 Required: 1-a. Compute the plantwide overhead rate that would be used in the company's conventional cost system. 1-6. Using the plantwide rate, compute the unit product cost for each product. 2a. Compute the activity rate for each activity cost pool. 2-6. Using the activity rates, compute the unit product cost for each product. Complete this question by entering your answers in the tabs below. Reg 14 Reg 1B Reg 24 Reg 28 Compute the plantwide overhead rate that would be used in the company's conventional cost system. (Round your answer to 2 decimal places.) Predetermined overhead rate per DLS Ren A Req 1B > Complete this question by entering your answers in the tabs below. Reg 14 Req 1B Reg 24 Req 25 Using the plantwide rate, compute the unit product cost for each product. (Round your intermediate calculations and final answers to 2 decimal places.) EX300 TX500 Unit product cost Complete this question by entering your answers in the tabs below. Req 14 Req 16 Reg 24 Req 28 Compute the activity rate for each activity cost pool. (Round your Machining and General factory activity rates to 2 decimal places.) Activity Cost Pools Machining Setups Product-level General factory Activity Rate per MHR per setup hr. per product per DLS Complete this question by entering your answers in the tabs below. Reg 14 Reg 1B Req 2A Reg 2B Using the activity rates, compute the unit product cost for each product. (Round your intermediate calculations and final answers to 2 decimal places.) EX300 TX500 Unit product cost
