Answer Happy

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 950 Direct labor rate per hour 18 In the traditional costing system, the predetermined overhead rate is 0 times of direct labor hours. Activity Cost Pools Engineering design Machine setup Machining Assembly Packaging and shipping Building occupancy Data relevant to t Cost Driv Engineering Setups Machine hor Number of subassem Packaging/s hours Machine ho
a relevant to the activity-based costing system Activity-Based Overhead Rate Is Cost Drivers Engineering hours Setups $30 per hour $200 per setup $25 per hour Machine hours Number of $8 per subassemblies Packaging/shipping hours $15 per hour $6 per hour y Machine hours subassembly Expected Use of Cost Drivers for Treadmill Ord 330 22 732 1,500 152 732
Machining Machine hours Assembly Number of subassemblies Packaging and Packaging/shipping shipping hours Building occupancy Machine hours Compute the overhead cost of the Slim-Way Salons, Inc. order under the trdaditional costing system. (Write your answer as a value only, e.g., 5,000 or 5000) Answer: $25 p $8 p SI $15 p $6 p