XYZ manufactures a line of high-end exercise equipment of commercial quality. Assume that the chief accountant has propo

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Xyz Manufactures A Line Of High End Exercise Equipment Of Commercial Quality Assume That The Chief Accountant Has Propo 1 (52.63 KiB) Viewed 13 times

XYZ manufactures a line of high-end exercise equipment of commercial quality. Assume that the chief accountant has proposed changing from a traditional costing system to an activity-based costing system. The financial vice president is not convinced, so she requests that the next large order for equipment be costed under both systems for purposes of comparison and analysis. An order from Slim-Way Salons, Inc., for 150 low-impact treadmills is received and is identified as the order to be subjected to dual costing. The following cost data relate to the Slim-Way order. Data relevant for both costing system: Direct Materials 55,500 Direct labor hours 940 Direct labor rate per hour 18 In the traditional costing system, the predetermined overhead rate is 0 times of direct labor hours. Data relevant to the activity-based costing system Activity-Based Expected Use of Cost Drivers for Treadmill Order Activity Cost Pools 330 Cost Drivers Engineering hours Setups Machine hours Number of Engineering design Machine setup Machining Assembly Overhead Rate $30 per hour $200 per setup $25 per hour $8 per 22 732 subassemblies subassembly 1,500 Packaging and shipping Packaging/shipping hours Machine hours $15 per hour 152 Building occupancy $6 per hour 732 Compute the overhead cost of the Slim-Way Salons, Inc. order under the traditional costing system. (Write your answer as a value only, e.g., 5,000 or 5000) Answer: