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Thank you so much !!! Rodent Corporation produces two types of computer mice, wired and wireless. The wired mice are designed as low-cost, reliable input
Thank you so much !!!
Rodent Corporation produces two types of computer mice, wired and wireless. The wired mice are designed as low-cost, reliable input devices. The company only recently began producing the higher quality wireless model. Since the introduction of the new product, profits have been steadily declining Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was $1,307,000 based on production of 300,000 wired mice and 90,000 wireless mice. Direct labor and direct materials costs were as follows: Wired Total Wireless Direct labor $1,062,000 $405,000 $1,467,000 Materials 720,000 681,000 1,401,000 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows Activity Level Cost Driver Costs Assigned Wired Wireless Total Number of production runs 660,000 50 55 493,000 Quality tests performed 11 18 29 Shipping orders processed 154,000 90 50 140 $1,307,000 Total overhead Required (a) How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product? (Round "Total Cost Per Unit" to 2 decimal places Overhead Total Cost Per Unit Wired WirelessStep by Step Solution
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