Required information Exercise 9-38 and 9-39 (Algo) Upriver Parts manufactures two products, V-1 and V-2, at its River Pl

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Required Information Exercise 9 38 And 9 39 Algo Upriver Parts Manufactures Two Products V 1 And V 2 At Its River Pl 1 (106.06 KiB) Viewed 34 times

Required information Exercise 9-38 and 9-39 (Algo) Upriver Parts manufactures two products, V-1 and V-2, at its River Plant. Selected data for an average month for the two products follow. Units produced Direct materials cost per unit Machine hours per unit Production runs per month V-1 10,000 $ 2 1 80 V-2 1,000 $ 4 2 40 Production at the plant is automated and any labor cost is included in overhead. Data on manufacturing overhead at the plant follow. Machine depreciation Setup labor Material handling Total $ 87,000 38,400 18,480 $143,880 Exercise 9-38 (Algo) Activity-Based Costing and Cost Driver Rates (LO 9-4) Required: a. Upriver currently applies overhead on the basis of machine hours. What is the predetermined overhead rate for the month? (Round your answer to 2 decimal places.) b. Upriver is thinking of adopting an ABC system. They have tentatively chosen the following cost drivers: machine hours for machine depreciation, production runs for setup labor, and direct material dollars for material handling. Compute the cost driver rates for the proposed system at Upriver. (Round "Machine depreciation" answer to 2 decimal places.) a b Overhead rate Machine depreciation Setup labor Material handling per machine hour per machine hour per production run % direct material cost Required: a. Compute the unit costs for the two products V-1 and V-2 using the current costing system at Upriver (using machine hours as the allocation basis). (Do not round intermediate calculations. Round your answers to 2 decimal places.) b. Compute the unit costs for the two products V-1 and V-2 using the proposed ABC system at Upriver. (Do not round intermediate calculations. Round your answers to decimal places.) Unit Cost V-1 V-2 a Using current costing system Using proposed ABC system b