Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Using ABC to allocate the OH what is the total per unit cost for Desk Lamps? Bandit Manufacturing produces three products: Desk Lamps, Floor Lamps
Using ABC to allocate the OH what is the total per unit cost for Desk Lamps?
Bandit Manufacturing produces three products: Desk Lamps, Floor Lamps and Ceil ing Lamps The following information is available for each product. Desk Floor Ceiling Direct material cost per unit $2.00 $10.00 $8.00 Direct labor cost per hour $15.00 $16.75 $18.00 Bandit Manufacturing presently applies overhead using a predetermined rate based on direct labor hours. Estimated Direct Labor hours for the year are 132,026. The product leader for Floor has suggested that Bandit Manufacturing switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year Estimated Cost DriverUnits Recommended Cost Driver Estimated Cost Activity 1256 Purchase Orders Purchase Orders Ordering Cost $33,912 Machine Operations Machine Hours $1.425,000 12500 Hours Compliance Test EnvironmentalCompliance $125,400 110 Test Total OH Cost $1,584,312 Actual January Production Floor Ceiling Desk Nu 5,800 5.875 7,200 UnitsP ed Direct Labor Hours 4,100 4.250 3.150 Machine Hours 375 206 442 Compliance Test 2 3 Purchase Orders 14 19 15 How much OH allocated to FloorLamps when direct labor hours is used as the volume based cost driver. a. s68 675 b. S49.200 C$175,475 d. 527.417Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started