Question
Required Information [The following information applies to the questions displayed below.] Tent Master produces Pup tents and Pop-up tents. The company budgets $336,000 of
Required Information [The following information applies to the questions displayed below.] Tent Master produces Pup tents and Pop-up tents. The company budgets $336,000 of overhead cost and 56,000 direct labor hours. Additional information follows. Per Unit Pup tent Pop-up tent Selling Price $ 76 Direct Materials $ 20 Direct Labor $ 40 71 18 Activity Assembly Budgeted Cost $224,000 Electricity Materials purchasing Total 38,000 74,008 $ 336,098 Activity Cost Driver Direct labor hours (DLH) Machine hours (MH) Purchase orders (PO) Budgeted Activity Usage 56,000 10,000 400 Required: 1. Compute an activity rate for each activity using activity-based costing. 2. The following actual activity usage produced 10,000 Pup tents and 5,000 Pop-up tents. Allocate overhead cost to Pup tents and to Pop-up tents and compute overhead cost per unit for each product. Activity Cost Driver Direct labor hours (DLH) Pup tents Activity Usage Pop-up tents 19,000 6,500 248 Machine hours (MH) Purchase orders (PO) 3,588 169 3. Compute product cost per unit for Pup tents and for Pop-up tents. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
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