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
Direct labor hours 950
Direct labor rate per hour 15
In the traditional costing system, the predetermined overhead rate is 300% of direct labor hours.
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)
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)
- Xyz Manufactures A Line Of High End Exercise Equipment Of Commercial Quality Assume That The Chief Accountant Has Propo 1 (30.85 KiB) Viewed 13 times
in the traditional costing system, the predetermined overhead rate is 300% of direct labor hours. Data relevant to the activity-based costing system Activity-Based Activity Cost Pools Engineering design Machine setup Machining Assembly Cost Drivers Engineering hours Setups Machine hours Number of Overhead Rate $30 per hour $200 per setup $25 per hour $8 per subassemblies subassembly Packaging and shipping Packaging/shipping hours Machine hours $15 per hour Building occupancy $6 per hour 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) Expected Use of Cost Drivers for Treadmill Order 330 22 732 1,500 152 732