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 (51.94 KiB) Viewed 12 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 20,000 950 Direct labor hours Direct labor rate per hour 15 In the traditional costing system, the predetermined overhead rate is 300% of direct labor hours. Data relevant to the activity-based costing system Expected Use of Cost Drivers Activity-Based Activity Cost Pools Cost Drivers Overhead Rate for Treadmill Order 330 Engineering design Machine setup Machining Assembly Engineering hours Setups Machine hours 22 $30 per hour $200 per setup $25 per hour $8 per 732 Number of subassemblies 1,500 Packaging and Packaging/shipping hours shipping $15 per hour 152 Building occupancy Machine hours $6 per hour 732 Compute the total cost of the Slim-Way Salons, Inc. order under the ABC costing system. (Write your answer as a value only, e.g., 5,000 or 5000) subassembly