Question
Question text Traditional Product Costing versus Activity-Based Costing Ridgeland Inc. makes backpacks for large sporting goods chains that are sold under the customers' store brand
Question text
Traditional Product Costing versus Activity-Based Costing
Ridgeland Inc. makes backpacks for large sporting goods chains that are sold under the customers' store brand names. The Accounting Department has identified the following overhead costs and cost drivers for next year:
Overhead Item Expected Costs Cost Driver Maximum Quantity Setup costs $1,224,000 Number of setups 7,200 Ordering costs 325,000 Number of orders 65,000 Maintenance 2,300,000 Number of machine hours 80,000 Power 220,000 Number of kilowatt hours 440,000
Total predicted direct labor hours for next year is 52,000. The following data are for two recently completed jobs:
Job 201 Job 202 Cost of direct materials $15,500 $17,000 Cost of direct labor $23,600 $67,300 Number of units completed 1,250 1,100 Number of direct labor hours 220 280 Number of setups 15 19 Number of orders 21 42 Number of machine hours 460 360 Number of kilowatt hours 200 300
a. Determine the unit cost for each job using a traditional plantwide overhead rate based on direct labor hours.
Round cost per unit answers to two decimal places when applicable.
Job 201 Job 202
Direct materials Answer
Direct labor Answer
Answer
Overhead Answer
Answer
Total cost Answer
Answer
Units produced Answer
Answer
Cost per unit Answer
Answer
b. Determine the unit cost for each job using ABC. Round cost per unit answers to two decimal places when applicable.
Job 201 Job 202 Direct materials Answer
Answer
Direct labor Answer
Answer
Setup cost Answer
Answer
Ordering costs Answer
Answer
Maintenance costs Answer
Answer
Power Answer
Answer
Total job costs Answer
Answer
Units produced Answer
Answer
Cost per unit Answer
Answer
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