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Product-Costing Accuracy, Plantwide and Departmental Rates, ABC Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The
Product-Costing Accuracy, Plantwide and Departmental Rates, ABC Escuha Company produces two type of calculators: scientific and business. Both products pass through two producing departments. The business calculator is by far the most popular. The following data have been gathered for these two products: Product-Related Data Scientific Business Units produced per year 72,000 Prime costs 720,000 $2,570,000 1,048,000 523,000 $257,000 104,800 52,300 Direct labor hours Machine hours Production runs 100 150 Inspection hours Maintenance hours 2,000 3,000 2,250 9,000 Department Data Department 1 Department 2 Direct labor hours: Scientific calculator 27,700 77,100 146,720 Business calculator 901,280 Total 223,820 928,980 Machine hours: Scientific calculator 25,100 Business calculator 27,200 413,440 440,640 109,560 134,660 Total Overhead costs: Setup costs $233,500 200,000 $233,500 200,000 Inspection costs Ch 3 & 4 Inspection costs 200,000 251,000 200,000 147,000 Power Maintenance 241,500 186,000 $870,500 Total $822,000 Required: 1. Compute the overhead cost per unit for each product using a plantwide, unit-based rate using direct labor hours. Round your calculations and answers to the nearest cent. Plantwide rate per direct labor hour Overhead cost per unit: Scientific per unit Business per unit 2. Compute the overhead cost per unit for each product using departmental rates. In calculating departmental rates, use machine hours for Department 1 and direct labor hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required. Departmental rates: Department 1 per machine hour Department 2 per direct labor hour Overhead cost per unit: Scientific per unit Business per unit Repeat using direct labor hours for Department 1 and machine hours for Department 2. Round departmental rates and the overhead cost per unit to the nearest cent if rounding is required
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