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What is the amount of overhead allocated to one unit of the basic model would be? Please explain it thoroughly. Jackson Enterprises manufactures two products-a
What is the amount of overhead allocated to one unit of the basic model would be?
Please explain it thoroughly.
Jackson Enterprises manufactures two products-a basic gizmo and an advanced model gizmo. The company is using an activity-based costing system. They have identified three activities for allocation of indirect costs. Activity Cost Driver Cost-Allocation Rate Materials receiving Number of parts $2.00 per part Production setup Number of setups $500.00 per setup Quality inspection Inspection time $90 per hour A production run for the basic model is 250 units, for the advanced model, 100 units. Each unit of product consumes the following activities: Number of Parts Number of Setups Inspection Time Basic Gizmo 10 1 setup per production run 10 minutes Advanced Gizmo 15 1 setup per production run 20 minutes Direct costs for the two products are as follows: Direct Materials Direct Labor Basic Gizmo $50.00 $75.00 Advanced Gizmo $95.00 $125.00 The amount of overhead allocated to one unit of the basic model would be: Note: Your answer should be in the format of "5***". Do not round interim calculations. Round the final answer to the nearest whole dollar. Use commas to separate thousandsStep by Step Solution
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