QUESTION 20 Bandit Manufacturing produces three products: Desk Lamps,Floor Lamps and Ceiling Lamps The following information is available for each product. Desk Floor Ceiling Direct material cost per unit Direct labor cost per hour $2.00 $8.00 $10.00 15.00 $%16.75 $18.00 Bandit Manufacturing presently applies overhead using a predetermined rate based on direct labor hours. Estimated Diredt Labor hours for the year are 132,026. The product leader for Floor has suggested that Bandit Manufacturing switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year Recommended Estimated Estimated Cost Cost Driver Cost Activity DriverUnits Purchase Orders $33,912 1256 Purchase Ordering Cost Machine Hours $1,425,000 12500 Hours Compliance $125,400 110 Test Total OH Cost $1,584,312 Machine Operations EnvironmentalCompliance Actual January Production Floor Ceiling 200 5,800 4,100 4,250 Desk Number of UnitsProduced 5,875 Direct Labor Hours 3,150 QUESTION 20 Bandit Manufacturing produces three products: Desk Lamps,Floor Lamps and Ceiling Lamps The following information is available for each product. Desk Floor Ceiling Direct material cost per unit Direct labor cost per hour $2.00 $8.00 $10.00 15.00 $%16.75 $18.00 Bandit Manufacturing presently applies overhead using a predetermined rate based on direct labor hours. Estimated Diredt Labor hours for the year are 132,026. The product leader for Floor has suggested that Bandit Manufacturing switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year Recommended Estimated Estimated Cost Cost Driver Cost Activity DriverUnits Purchase Orders $33,912 1256 Purchase Ordering Cost Machine Hours $1,425,000 12500 Hours Compliance $125,400 110 Test Total OH Cost $1,584,312 Machine Operations EnvironmentalCompliance Actual January Production Floor Ceiling 200 5,800 4,100 4,250 Desk Number of UnitsProduced 5,875 Direct Labor Hours 3,150