Questions in the attached document
Landon Company makes two models of children's playhouses, the Castle and the Mansion. Basic production information follows: Castle Mansion Direct materials $ 45 $ 72 cost per unit Direct labor cost 23 35 per unit Sales price per 350 565 unit Expected productio 700units 400units n per month Landon has monthly overhead of $219,000, which is divided into the following cost pools: Setup costs $ 86,000 Quality control 73,000 Maintenance 60,000 Total $ 219,000 The company has also compiled the following information about the chosen cost drivers: Castle Mansion Total Number of setups 42 58 100 Number of 340 390 730 inspections Number of 1,700 1,300 3,000 machine hours Requirement 1: Suppose Landon used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. Overhead assigned Castle Model: $ Mansion Model: $ Total Overhead Cost $ Requirement 2: Calculate the production cost per unit for each of Landon's products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Castle Mansion Unit cost $ $ Requirement 3: Calculate Landon's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places.) Castle Gross margin Mansion $ $ Requirement 4: Select the appropriate cost driver for each cost pool and calculate the activity rates if Landon wanted to implement an ABC system. (Round your answers to 2 decimal places.) Setup Costs Quality Control Maintenance $ $ $ Requirement 5: Assuming an ABC system, assign overhead costs to each product based on activity demands. Overhead Overhead Assigned Assigned To Mansion To Castle Setup Cost $ $ Quality $ $ Control Maintenance $ $ Total Overhead Cost $ $ Requirement 6: Calculate the production cost per unit for each of Landon's products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Castle Unit cost Mansion $ $ Requirement 7: Calculate Landon's gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places.) Castle Gross margin Mansion $ $ Larkspur Corp. manufactures bird feeders. It currently has two product lines, the standard and the deluxe. Larkspur has a total of $137,250 in overhead. The company has identified the following information about its overhead activity pools and the two product lines: Quantity Cost Consumed Quantity Consumed Assigned by by Activity Pools Cost Driver to Pool Standard Deluxe Material Number of handling moves $ 3,500 20 moves 50 moves Number of Quality control inspections $ 33,750 250 inspections 125 inspections Machine Number of 5,000 machine 5,000 machine maintenance machine hrs $ 100,000 hours hours Requirement 1: Suppose Larkspur used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest dollar amount.) Standard Model $ overhead assigned Deluxe Model $ overhead assigned Requirement 2: Calculate the activity rates for each cost pool in Larkspur's ABC system. Activity Rates Material Handling $ per move Quality Control $ per inspection Maintenance $ per machine hour Requirement 3: Calculate the amount of overhead that Larkspur will assign to the standard line if it uses an ABC system. Standard Model: Material Handling $ Quality Control $ Maintenance $ Total Overhead Assigned $ Requirement 4: Determine the amount of overhead Larkspur will assign to the deluxe line if it uses an ABC system. Deluxe Model: Material Handling $ Quality Control $ Maintenance $ Total Overhead Assigned $
