The question requires to use Traditional costing and answers to two decimal places.
a) Compute the company-wide predetermined overhead rate
b) Compute the per-unit product cost for Pure-Active and Premier-Active using traditional costing.
c) Using the price per unit given above, and the cost per unit you computed in b), calculate the product margin per unit and the product margin percentage for Pure-Active and Premier-Active
Gynriostsehetl Company makes two types of beauty products - Pure-Active and Premier-Active. Data concerning these two product lines appear below: Pure-Active Premier-Active Selling Price per unit $200.00 $256.50 Direct Materials per Unit $100.00 $125.00 Direct Labor Hours per unit 0.80 DLHs 1.25 DLHs Estimated annual production and sales 25,000 units 64,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours and the cost per direct labor hour is $40. Data concerning manufacturing overhead for the upcoming year appear below: Management Salaries $ 800,000 Vehicle Expenses 500,000 Machine Depreciation 1,000,000 Office Supplies 100,000 Administrative Expenses 600,000 Estimated total manufacturing overhead $3,000,000 The company is considering replacing its traditional costing system with an activity-based costing system that would assign its manufacturing overhead to the following five activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs): Activity Cost Pool Total Cost Pool Activity Measure Total Activity Pure-Active Supporting direct labor 600,000 Number of Direct labor-hours ??? DLHs Batch setups 800,000 Number of setups ??? DLHs 500 Machining 400 $ 1,200,000 Number of Machine Hours 1.000 ???manufacturing overhead to the following five activity cost pools (the Other cost pool includes organization-sustaining costs and idle capacity costs): Activity Cost Pool Total Cost Pool Activity Measure Total Activity Pure-Active Supporting direct labor 600,000 Number of Direct labor-hours ??? DLHs ??? DLHs Batch setups $ 800,000 Number of setups 500 400 Machining $ 1,200,000 Number of Machine Hours 1,000 ??? Product sustaining $ 200,000 Number of Products 2 1 Other $ 200,000 This is an organization sustaining activity Not applicable Not applicable TOTAL $ 3,000,000 REQUIRED: 1: Using Traditional Costing, complete the table below: TRADITIONAL COSTING (All atswers to two decimal places) a) Compute the company-wide predetermined overhead rate b) Compute the per-unit product cost for Pure-Active and Premier-Active using traditional costing use chart below) PURE-ACTIVE PREMIER-ACTIVE (per unit) (per unit)a) Compute the company-wide predetermined overnead rate b) Compute the per-unit product cost for Pure-Active and Premier-Active using traditional costing use chart below) PURE-ACTIVE PREMIER-ACTIVE (per unit) (per unit) Total UNIT Cost $ 0.00 $ 0.00 c) Using the price per unit given above, and the cost per unit you computed in (b) above, calculate he product margin per unit and the product margin percentage for Pure-Active and Premier-Active PURE-ACTIVE PREMIER-ACTIVE Selling price per unit Cost parunit S 0.00 0.00 Product Margin per unit Product Margin %
