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Snowden Industries produces two electronic decoders, P and Q . Decoder P is more sophisticated and requires more programming and testing than does Decoder Q
Snowden Industries produces two electronic decoders, and Q Decoder is more sophisticated and requires more programming and testing than does Decoder Q Because of these product differences, the company wants to use activitybased costing to allocate overhead costs. It has identified four activity pools. Relevant information follows:
tableActivity Pools,tableCost PoolTotalCost DriverRepair and maintenance on assembly machine,$Number of units producedProgramming costNumber of programming hoursSoftware inspections,Number of inspectionsProduct testing,Number of testsTotal overhead cost,$
Expected activity for each product follows:
tabletableNumber ofUnitstableNumber ofProgrammingHourstableNumber ofInspectionstableNumber ofTestsDecoder PDecoder QTotal
Assume that before shifting to activitybased costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow:
tableDirect LaborHoursDecoder PDecoder Total
Required
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.
Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC.
Note: Round intermediate calculations and final answers to decimal places.
tableCost per unitMethodDecoder Decoder
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