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THERE ARE TWO QUESTIONS INCLUDED AFTER THE DATA. make sure to answer both Califomia Dreamin' manufactures 1960's style clothing and accessories. The company produces
THERE ARE TWO QUESTIONS INCLUDED AFTER THE DATA. make sure to answer both Califomia Dreamin' manufactures 1960's style clothing and accessories. The company produces two main products Floral and Tie-Dye Camently the company uses a traditional overhead rate in which Manufacturing Overhead allocated to products based on direct labor hours logged. The projected production levels for the period are 1,000 units of Floral and 500 units of Tie-Dye Dun to profitability concerns, management is considering switching to Activity Based Costing (ABC). Management has divided Manufacturing Overhead Costs into three activities and cost pools Assembly 5:32.000, Machine Setup $12.000, and Product Movement $102,600, Management has identified the following cost drivers for each overhead activity direct labor hours for assembly, number of setups for machine setup, and number of moves for product movement The following information has been compiled for each product line: direct labor requirements machine setup requirements product movement requirements Eloral Tie Dye 0.75 direct labor hours per unit 10 direct labor hours per 1 setup per every 10 units produced 1 setup for every 25 units produced 1 move per every 25 units produced 1 move per every 25 units produced QUESTION 1: Using the above information, determine the per unit amount by which the Tie-Dye line is evercostedundercosted by the curent costing system A. $25 01 undercosted OB. $9.64 undercosted OC $1.18 overcosted OD. $20.71 undercosted OE. $19.28 overcosted
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