Question
Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total
Rondeau, Incorporated, manufactures and sells two products: Product V9 and Product M6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below: Product V9 Product M6 Total direct labor-hours Expected Production 340 440 Direct Labor-Hours Per Unit 9.4 6.4 Total Direct Labor-Hours 3,196 2,816 6,012 The direct labor rate is $24.20 per DLH. The direct materials cost per unit for each product is given below: Product V9 Product M6 Direct Materials Cost per Unit $ 275.60 $ 168.80 The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Activity Cost Pools Activity Measures Labor-related Product testing Order size DLHs Tests MHs Estimated Overhead Cost $ 95,656 70,408 386,000 Product V9 3,196 Expected Activity Product M6 2,816 Total 6,012 660 4,100 880 1,540 3,760 7,860 $ 552,064 Required: Calculate the difference between the unit product costs under the traditional costing method and the activity-based costing system for each of the two products. (Round your intermediate calculations and final answers to 2 decimal places. Enter your answers as positive values.) Traditional unit product cost ABC unit product cost Difference Product V9 Product M6 $ 0.00 $ 0.00
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