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y LieCDOlICs produces video games in three market categories: commercial, home, and miniature. Fenway has traditionally allocated overhead costs to the three products using the
y LieCDOlICs produces video games in three market categories: commercial, home, and miniature. Fenway has traditionally allocated overhead costs to the three products using the companywide allocation base of direct labor hours. The company recently implemented an ABC system when it installed computer-controlled assembly stations that rendered following activity cost pools and cost drivers: the traditional costing system ineffective. In implementing the ABC system, the company identified the Pooled Cost Types of Costs Cost Dri $360,000 Indirect labor wages, supplies, factory utilities Unit Batch194,400 Materials handling, inventory storage, labor for Product machine maintenance Number of production orde setups, packaging, labeling and shipping, scheduling 105,600 300,000 Rent, general utilities, maintenance, facility Time spent by research de Square footage Research and development Facility depreciation, admin. salaries Additional data for each of the product lines follow: Miniature Commeroial 25.00/unit s 15.00/unit 12.00/unit Direct materials cost Direct labor cost Number of labor hours Number of machine hours Number of produetion orders Research and development time Number of units Square footage s10.00/hour 8.00/hour 9.00/hour 6,000 10,000 200 12,000 45,000 2,000 2,000 25, 000 800 20,000 80,000 3,000 10% 20% 708 100% 15,000 20,000 45,000 50,000 14,000 30,000 74,000 100,000 Prev 1 of 5 Next>
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