So I was looking to have all the steps for this problem so that I can think about the answers and figure it out. If you could explain how I can get each answer that would be perfect.
ABC Manufacturing, Inc. produces three gadgets (Ace, Best, and Champ) in two departments, Machining and Assembly. Each product requires one hour of direct labor for completion. The following table provides production and cost data for the year. Ace Best Champ Total Number of units 25,000 15,000 5,000 45,000 Machine hours 2,500 1,500 2,000 6,000 Direct materials $1,000,000 $450,000 $275,000 $1,725,000 Direct labor $375,000 $225,000 $75,000 $675,000 Overhead Macining $900,000 Assembly $450,000 Total overhead $1,350,000 Total costs $3,750,000 Required: Use the plantwide allocation method to determine the unit cost for each product. POHR RATE DL DM MOH Total Cost per unit Machine Hours Considering the nature of the production processes, the cost accountant of ABC Manufacturing decided to experiment with the department-specific allocation approach and determined that the Machining Department can use machine hours as the allocation base for overhead assignment while the Assembly Department can use direct labor costs instead. Required: Use the department allocation method to determine the unit cost for each product.The cost accountant of ABC Manufacturing attended a workshop on activity-based costing and was impressed by the results. After consulting with the production personnel, he prepared the following information on cost drivers and the estimated volume for each driver. Activity Cost driver Cost driver volume Total Machining Dept. ACE Best Champ Setup Number of setups 125 75 50 250 Machining Machine hours 2,500 1500 2000 6,000 Assembly Dept: Assembly Direct labor hours 25,000 15,000 5,000 45,000 Inspection Number of inspections 50 25 25 100 The cost accountant also determined how much overhead costs were incurred in each of the four activities as follows: Activity Overhead costs Setup $150,000 Machining $750,000 Total Machining department $900,000 overhead Assembly $360.000 Inspection $90.000 Total Assembly department $450,000 overhead Total overhead costs $1,350,000 Required: 1. Determine the cost driver rate for each activity cost pool. 2. Use the activity-based costing method to determine the unit cost for each product.Total overhead costs $1,350,000 Required: 1. Determine the cost driver rate for each activity cost pool. 2. Use the activity-based costing method to determine the unit cost for each product. ABC Rate Setup Machining Assembly Inspection Unit CostConsidering the nature of the production processes, the cost accountant of ABC Manufacturing decided to experiment with the department-specific allocation approach and determined that the Machining Department can use machine hours as the allocation base for overhead assignment while the Assembly Department can use direct labor costs instead. Required: Use the department allocation method to determine the unit cost for each product. Direct materials Direct labor Applied overhead Applied Overhead: Machining per machine hour Assembly of direct labor cost DL DM MOH Unit cost The cost accountant of ABC Manufacturing attended a workshop on activity-based costing and was impressed by the results. After consulting with the production personnel, he prepared the following information on cost drivers and the estimated volume for each driver
