Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Saved Help Save & Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing
Saved Help Save & Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Activity Pools Cost Pool Total Repair and maintenance on assembly machine $136,800 Programming cost Software inspections Product testing Total overhead cost Expected activity for each product follows: Cost Driver Number of units produced Number of programming hours 143,200 27,000 Number of inspections 31,000 Number of tests $338,000 Number of Number of Programming Units Hours Number of Inspections Number of Tests Decoder P Decoder Q 17,100 2,200 456 2,800 39,900 1,800 144 2,200 Total 57,000 4,000 600 5,000 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Help Sav Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: Decoder P Decoder Q Total Direct Labor Hours 7,800 18,200 26,000 Required a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. (Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar amount.) Allocated Required A Required B Compute the amount of overhead cos] allocated to each type of (Round intermediate calculations to 2 decimal places. Round you Decoder P Decoder Q Allocated Cost Total Required A Required B Determine the cost per unit for overhead when using direct labor hours as the alloca intermediate calculations and final answers to 2 decimal places.) Cost per unit Method ABC Labor hours Decoder P Decoder Q < Required A
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started