Answered step by step
Verified Expert Solution
Question
...
1 Approved Answer
Rosie Learns, Inc. manufactures robots and uses an activity-based costing system. Rosie Learns activities and related data are listed below: Activity Budgeted Cost Allocation Base
Rosie Learns, Inc. manufactures robots and uses an activity-based costing system. Rosie Learns activities and related data are listed below:
Activity | Budgeted Cost | Allocation Base | Predetermined Overhead Allocation Rate |
Materials Handling | $230,000 | Number of Parts | $1.50 |
Assembly | 3,200,000 | Number of assembling direct labor hours | 16.00 |
Finishing | 150,000 | Number of finished units* | 3.00 |
*The number of units receiving the finish activity, not the number of units transferred to Finished Goods Inventory.
Rosie Learns produces two models of robots, the Rosie V and the Rosie X. The Rosie X has fewer parts and requires no finishing work.
Product | Total Units Produced | Total Direct Materials Costs | Total Direct Labor Costs | Total Number of Parts | Total Assembling Direct Labor Hours |
Rosie V | 3,000 | 54,000 | 67,500 | 8,000 | 4,500 |
Rosie X | 3,500 | 56,000 | 52,500 | 6,000 | 3,500 |
Requirements:
- Compute the manufacturing product costs per unit of each model of robot.
- Suppose that pre-manufacturing activities, such as product design were assigned to Roxie V at $8 each and to Rosie X at $5 each. Similar analyses were done on post-manufacturing actives such as distribution, marketing, and customer service. The post-manufacturing costs were $18 for Rosie V and $14 for Rosie X. What is the full product costs per unit?
- Which product costs are reported in the external financial statements? Which costs are used for management decision making? What is the difference?
- What price should Rosie Learns set for Rosie X to earn a target net profit of $20 per robot?
Step by Step Solution
There are 3 Steps involved in it
Step: 1
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-text-image.webp)
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Step: 3
![blur-text-image](https://dsd5zvtm8ll6.cloudfront.net/includes/images/document_product_info/blur-subtext-image.webp)
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started