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Product x200 X99 Direct Labor-Hours 0.4 DLHS per unit 0.6 DLHS per unit Annual Production 16,000 units Total Direct Labor-Hours 6,400 DLHS 22,200 DLHS
Product x200 X99 Direct Labor-Hours 0.4 DLHS per unit 0.6 DLHS per unit Annual Production 16,000 units Total Direct Labor-Hours 6,400 DLHS 22,200 DLHS 37,000 units 28,600 DLHS Additional information about the company follows: a. Model X200 requires $40 in direct materials per unit, and model X99 requires $20. b. The direct labor workers are paid $40 per hour. c. The company has always used direct labor-hours as the allocation base for applying manufacturing overhead cost to products. d. Model X200 is more complex to manufacture than model X99 and requires the use of special equipment. e. Because of the special work required in (d) above, the company is considering the use of activity-based absorption costing to apply manufacturing overhead cost to products. Three activity cost pools have been identified as follows: $ 220,400 381,500 1,716,000 x200 116 1,090 6,400 Estimated Total Activity x99 174 Total 0 22,200 290 1,090 28,600 Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours Estimated Total Cost $ 2,317,900 Required: 1. Assume that the company continues to use direct labor-hours as the allocation base for applying overhead cost to products. a. Compute the plantwide predetermined overhead rate. b. Compute the unit product cost of each model. 2. Assume that the company decides to use activity-based absorption costing to apply overhead cost to products. a. Compute the activity rate for each activity cost pool and determine the amount of overhead cost that would be applied to each model using the activity-based approach. b. Compute the unit product cost of each model. Complete this question by entering your answers in the tabs below. Req 1A Req 1B Req 2A Part 1 Req 2A Part 2 Req 2B Assume that the company continues to use direct labor-hours as the allocation base for applying overhead cost to products. Compute the unit product cost of each model. (Round "Predetermined overhead rate" to nearest dollar amount. Round other intermediate calculations and final answers to 2 decimal places.) Model X200 X99 Unit product cost
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