Q4. Mark Ward, Whitestone's president, has been reading about a product-costing method called activity based costing...
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Q4. Mark Ward, Whitestone's president, has been reading about a product-costing method called activity based costing Ward is convinced that activity-based costing will cast a new light on future profits. As a result, Brian Walters, Whitestone's director of cost management, has accumulated cost pool informa tion for this year shown on the following chart. This information is based on a product mix of 5,000 units of IR-14 and 5.000 units of RM-13 Cost Pool Information for 20x1 Cost Pool Direct labor.. Machining Assembly Material handling Inspection Machining Assembly Material handling Inspection Activity JR-14 RM-13 Direct-labor hours 10,000 5,000 Machine hours 15,000 30,000 Assembly hours 6,000 5,500 Number of parts 5 10 Inspection hours 5,000 7,500 $ 424,528 216,981 56,604 117.925 Total Estimated M/O $ 816,038 ed: a. Calculate the amount of M/O applied on the products using traditional approach where the cost driver is DLH. b. Calculate the amount of M/O applied on the products using ABC. Q4. Mark Ward, Whitestone's president, has been reading about a product-costing method called activity based costing Ward is convinced that activity-based costing will cast a new light on future profits. As a result, Brian Walters, Whitestone's director of cost management, has accumulated cost pool informa tion for this year shown on the following chart. This information is based on a product mix of 5,000 units of IR-14 and 5.000 units of RM-13 Cost Pool Information for 20x1 Cost Pool Direct labor.. Machining Assembly Material handling Inspection Machining Assembly Material handling Inspection Activity JR-14 RM-13 Direct-labor hours 10,000 5,000 Machine hours 15,000 30,000 Assembly hours 6,000 5,500 Number of parts 5 10 Inspection hours 5,000 7,500 $ 424,528 216,981 56,604 117.925 Total Estimated M/O $ 816,038 ed: a. Calculate the amount of M/O applied on the products using traditional approach where the cost driver is DLH. b. Calculate the amount of M/O applied on the products using ABC.
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