Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Show the work please. Drab Dog Collars uses activity-based costing. Drab's system has the following features: B (Click the icon to view the data table.)

image text in transcribedimage text in transcribedimage text in transcribed

Show the work please.

Drab Dog Collars uses activity-based costing. Drab's system has the following features: B (Click the icon to view the data table.) Each collar has three parts, direct materials cost is $6.00 per collar, and direct labor cost is $3.00 per collar. Suppose Animal Hut has asked for a bid on 25,000 dog collars. Drab will issue a total of 75 purchase orders if Animal Hut accepts Drab's bid. Read the requirements. Requirement 1. Compute the total cost Drab will incur to purchase the needed materials and then assemble and package 25,000 dog collars. Also compute the cost per collar. (Round the total cost to the nearest dollar and the cost per collar to the nearest cent.) Direct materials 150000 Direct labor 75000 4275 Purchasing Assembling Packaging Total manufacturing cost Number of units 1. 2. 3. Compute the total estimated cost Drab will incur to purchase the needed materials and then assemble and package 25,000 dog collars. Also compute the cost per collar. For bidding, Drab adds a 25% markup to total cost. What total price will the company bid for the entire Animal Hut order? Suppose that instead of an ABC system, Drab has a traditional product costing system that allocates indirect costs at the rate of $9.30 per direct labor hour. The dog collar order will require 9,000 direct labor hours. What total price will Drab bid using this system's total cost? Use your answers to Requirements 2 and 3 to explain how ABC can help Drab make a better decision about the bid price it will offer Animal Hut. 4. Activity Purchasing Assembling Packaging Predetermined Overhead Allocation Base Allocation Rate Number of purchase orders $57.00 per purchase order Number of parts 0.40 per part Number of finished collars 0.25 per collar

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

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

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Global Marketing management

Authors: Masaaki Kotabe, Kristiaan Helsen

5th edition

470505745, 978-0470505748

Students also viewed these Accounting questions

Question

1. What factors lead to criminal behaviour?

Answered: 1 week ago