Harrison Company Makes Two Products And Uses A Conventional Costing System In Which A Single Plantwide Predetermined Ov 1 (37.5 KiB) Viewed 19 times
Harrison Company Makes Two Products And Uses A Conventional Costing System In Which A Single Plantwide Predetermined Ov 2 (11.25 KiB) Viewed 19 times
Harrison Company makes two products and uses a conventional costing system in which a single plantwide, predetermined overhead rate is computed based on direct labour-hours. These products are customized to some degree for specific customers. Data for the two products for the upcoming year follow: Parcel Direct materials cost per unit Direct labour cost per unit Direct labour-hours per unit Number of units produced Rascon $ 29.30 $ 21.00 21.60 S 4.40 0.90 0,40 32,000 118,000 $ Required: 1. The company's manufacturing overhead costs for the year are expected to be $860,000. Using the company's traditional costing system, compute the unit product costs for the two products. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Rascon $ Parcel 27.53 Unit product cost 39.89 $ 2. Management is considering an ABC system in which half of the overhead would continue to be allocated on the basis of direct labour-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:
Rascon Parcel Total Engineering design time (in hours) 5,400 2,700 8,100 Compute the unit product costs for the two products using the proposed ABC system. (Do not round intermediate calculations and round your final answers to 2 decimal places.) Rascon Parcel Unit product cost
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