Question

Chang Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its...

Chang 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, Plain and Fancy, about which it has provided the following data:

Plain Fancy
Direct materials per unit $ 25.40 $ 60.20
Direct labor per unit $ 5.90 $ 29.50
Direct labor-hours per unit 0.30 1.50
Annual production 45,000 15,000

The company's estimated total manufacturing overhead for the year is $1,310,400 and the company's estimated total direct labor-hours for the year is 36,000.

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 Estimated Overhead Cost
Supporting direct labor (DLHs) $ 576,000
Setting up machines (setups) 368,100
Parts administration (part types) 366,300
Total $ 1,310,400
Expected Activity
Plain Fancy Total
DLHs 13,500 22,500 36,000
Setups 1,193 852 2,045
Part types 660 330 990

The manufacturing overhead that would be applied to a unit of product Fancy under the activity-based costing system is closest to:

$10.92.

$28.24.

$72.10.

$36.40.

Homework Answers

Answer #1

Solution:

Computation of overhead allocated to each unit of product Fancy
Activity Estimated Overhead Cost Activity Base Usage of Activity Base Activity Rate Fancy
Usage Allocated Costs
Supporting direct labor $5,76,000.00 DLHs 36000 $16.00 22500 $3,60,000
Setting up machine $3,68,100.00 setups 2045 $180.00 852 $1,53,360
Parts administration $3,66,300.00 part types 990 $370.00 330 $1,22,100
Total $6,35,460
/ units of Product fancy 15000
Manufacturing overhead applied to a unit of product Fancy $42.36

Correct answer is "$42.36".

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Chang Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its...
Chang 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, Plain and Fancy, about which it has provided the following data: Plain Fancy Direct materials per unit $ 24.50 $ 59.30 Direct labor per unit $ 5.00 $ 25.00 Direct labor-hours per unit 0.20 1.00 Annual production 45,000 15,000 The company's estimated total manufacturing overhead for the year...
Coudriet Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its...
Coudriet 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, P93S and N40S, about which it has provided the following data: P93S N40S Direct materials per unit $ 21.90 $ 54.80 Direct labor per unit $ 8.80 $ 13.20 Direct labor-hours per unit 0.80 1.20 Annual production (units) 35,000 15,000 The company's estimated total manufacturing overhead for the...
Russell Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its...
Russell 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, Slow and Fast, about which it has provided the following data: Slow Fast Direct materials per unit $ 14.10 $ 43.40 Direct labor per unit $ 3.20 $ 25.60 Direct labor-hours per unit 0.20 1.60 Annual production 48,000 33,000 The company's estimated total manufacturing overhead for the year...
Feauto Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its...
Feauto 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, I63E and E76I, about which it has provided the following data: I63E E76I Direct materials per unit $ 21.90 $ 65.70 Direct labor per unit $ 11.10 $ 33.30 Direct labor-hours per unit 0.50 1.50 Annual production (units) 48,000 16,000 The company's estimated total manufacturing overhead for the...
Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation...
Problem 7-17 (Algo) Comparing Traditional and Activity-Based Product Margins [LO7-1, LO7-3, LO7-4, LO7-5] Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 115.00 $ 84.00 Direct materials per unit $ 65.50 $ 54.00 Direct labor per unit $ 13.60 $ 8.00 Direct labor-hours per unit 1.7 DLHs 1.0 DLHs Estimated annual production and sales 33,000 units 61,000 units The company has...
Contrasting ABC and Conventional Product Costs Rocky Mountain Corporation makes two types of hiking boots—Xactive and...
Contrasting ABC and Conventional Product Costs Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker, Data concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $64.80 $51.00 Direct labor costs per unit $18.20 $13.00 Direct labor -hours per unit 1.4 DLHs 1.0 DLHs Estimated annual production and sales 25,000 units 75,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing...
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company’s two product lines appear below:...
Stillicum Corporation makes ultra light-weight backpacking tents. Data concerning the company’s two product lines appear below: Deluxe Standard Direct materials per unit $ 59.00 $ 47.00 Direct labor per unit $ 17.00 $ 14.00 Direct labor-hours per unit 0.70 DLHs 1.40 DLHs Estimated annual production 10,000 units 50,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct labor-hours for the upcoming year appear...
Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product...
Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $ 65.20 $ 51.40 Direct labor cost per unit $ 18.60 $ 13.40 Direct labor-hours per unit 1.4 DLHs 1 DLHs Estimated annual production and sales 29,000 units 79,000 units The company has a conventional costing system in which manufacturing overhead is applied to units based on direct labor-hours. Data concerning manufacturing overhead and direct...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 130.00 $ 91.00 Direct materials per unit $ 64.30 $ 50.00 Direct labor per unit $ 11.20 $ 8.00 Direct labor-hours per unit 1.4 DLHs 1.0 DLHs Estimated annual production and sales 21,000 units 72,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these...
Smoky Mountain Corporation makes two types of hiking boots—the Xtreme and the Pathfinder. Data concerning these two product lines appear below: Xtreme Pathfinder Selling price per unit $ 118.00 $ 84.00 Direct materials per unit $ 65.00 $ 52.00 Direct labor per unit $ 13.50 $ 9.00 Direct labor-hours per unit 1.5 DLHs 1.0 DLHs Estimated annual production and sales 28,000 units 65,000 units The company has a traditional costing system in which manufacturing overhead is applied to units based...
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT