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Q14. ABC Corp manufactures products X45E and K36N. The company uses a plantwide overhead rate based on DLHs (direct labor-hours). It is considering implementing an

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Q14. ABC Corp manufactures products X45E and K36N. The company uses a plantwide overhead rate based on DLHs (direct labor-hours). It is considering implementing an activity-based costing (ABC) system that allocates its manufacturing overhead to four cost pools. The following additional information is available for the company as a whole and for Products X45E and K36N. [3 Marks Activity Cost Pool Activity Measure Total Cost Total Activity Machining Machine-hours $ 120.000 6.000 MHS Machine setups Number of setups $ 90.000 150 setups Product design Number of products $ 84,000 2 products Order size Direct labor-hours $ 300.000 10.000 DLHS Product Activity Measure X45E K36N Machine-hours 4.000 2.000 Number of setups 90 60 Number of products 1 1 Direct labor-hours 7.000 3.000 Determine the percentage of the total overhead cost that is allocated to Product K36N using the plantwide overhead rate? Q15. Highlander Cutlery manufactures kitchen knives. One of the employees, whose job is to cut out wooden knife handles, worked 53 hours during a week in January The employee earns $16 per hour for a 40-hour week, and overtime is paid after 40 hours. For additional hours the employee is paid an overtime rate of $21 per hour. The employee's time was spent as follows: Regular duties involving cutting out knife handles 45 hours General shop cleanup duties 5 hours Idle time due to power outage 3 hours a. Calculate the total cost of the employee's wages during the week described above. [1 Mark b. Determine the portion of this cost to be classified in each of the following categories. Estimate the values of X1, X2, X3, X4 and X5. 15 Marks X2 i. Direct labor X1 ii. Manufacturing overhead (idle time) iii. Manufacturing overhead (overtime premium) X3 iv. Manufacturing overhead (indirect labor) X4 Total cost of wages X5 V

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