Problem 4-15 (Static) Contrasting ABC and Conventional Product Costs [LO4-2, LO4-3, LO4-4] Marine, Incorporated, manutactures a product that is available in both a flexible and a tigid model. The company has made the rigid model for years; the fiexible model was introduced several years ago to tap a new segment of the matket. Since introduction of the fiexible model, the company's profits have steadily declined, and management has become concerned about the accuracy of its costing system. Sales of the flexible model have been increasing rapidly. Qvertead is applied to products on the basis of direct labot-hours. At the beginning of the current yeat, management estimated that $600,000 in overhead costs would be incurred and the company would produce and sell 1,000 units of the fiexible model and 10,000 units of the regular model. The fiexible model requires 20 houls of direct labor time per unit, and the regular model requires 10 hour Direct materials and labor costs per unit are given below. Required: 1-. Compute the predetermined overhead rate using direct labor-hours as the bass for allocating overhead costs to products. 1.b. Compute the unit product cost for one unit of each model 2. An intern suggested that the company use activity based costing to cost its products. A team was formed to investigate this idea. It came back with the recommendation that four activity cost pools be used These cost pools and their associated activities are listed as follows: Compute the activity rate for each of the activity cost pools 3a. Using activity-based costing, determine the total amount of oveinead that would be assigned to cach model for the yeat 3b. Using activity based costing, corvpute the unit product cost for one unit of each model Complete this question by entering your answers in the tabs below. Compute the activity rate for each of the activity cost pools. 3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each mod 3-b. Using activity-based costing, compute the unit product cost for one unit of each model. Complete this question by entering your answers in the tabs below. Compute the unit producy cost for one unit of each model. 3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the 3-b. Using activity-based costing, compute the unit product cost for one unit of each model. Complete this question by entering your answers in the tabs below. Compute the activity rate for each of the activity cost pools. Compute the activity rate for each of the activity cost pools. 3-a. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. 3-b. Using activity based costing, compute the unit product cost for one unit of each model. Complete this question by entering your answers in the tabs below. Using activity based costing, determine the total amount of overhead that would be assigned to each model for the year. 1.a, Compute the predetermined overhead rate using direct labor-hours as the basis for allocating overhead costs to products. 1-b. Compute the unit product cost for one unit of each model. 2 An intern suggested that the company use activity-based costing to cost its products. A team was formed to investigate this idea. It came back wath the recommendation that four activity cost pools be used. These cost pools and their associated activities are listed as follows Compute the activity rate for each of the activity cost pools. 3-. Using activity-based costing, determine the total amount of overhead that would be assigned to each model for the year. 3-b. Using activity based costing. compute the unit product cost for one unit of each model Complete this quastion by entering your answers in the tabs below. Using activity based costing, compute the unit prcduct cost for one unit of each model, (ound your answers to 2 decirnal placesi)
