Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Werger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct
Werger Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHS). The company has two products, W82R and L48S, about which it has provided the following data: Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) W82R L48S $ 23.80 $ 59.90 $ 23.90 $ 64.10 0.70 2.40 35,600 24,500 The company's estimated total manufacturing overhead for the year is $2,663,812 and the company's estimated total direct labor-hours for the year is 83,720. The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Activities and Activity Measures Supporting direct labor (DLHS) Setting up machines (setups) Parts administration (part types) Total Estimated Overhead Cost $ 669,760 560,942 1,433, 110 $2,663, 812 Activities Supporting direct labor Setting up machines Parts administration W82R 24,920 892 2,270 L48S 58,800 3,390 1,200 Total 83,720 4,282 3, 470 Required: a. Determine the unit product cost of each of the company's two products under the traditional costing system. b. Determine the unit product cost of each of the company's two products under activity-based costing system. (For all requirements, round your intermediate calculations and final answers to 2 decimal places.) W82R L48S a. Unit product cost b. Unit product cost
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered 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