Plantwide versus Departmental Rates, Product-Costing Accuracy:
Activity-Based Costing
Ramsey Company produces speakers (Model A and Model B). Both
products pass through two producing departments. Model A's
production is much more labor-intensive than that of Model B. Model
B is also the more popular of the two speakers. The following data
has been gathered for the two products:
Required:
1. Compute the overhead cost per unit for
each product by using a plantwide rate based on direct labor hours.
(Round to two decimal places.)
Plantwide rate: $fill in the blank f342b6feff8e056_1 per
DLH.
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Divide total overhead costs by total direct labor hours.
Multiply overhead rate by hours for each model, and then divide by
units produced.
2. Compute the overhead cost per unit for
each product by using ABC. (Round rates and unit overhead costs to
two decimal places.)
Note: Be sure to complete both tables
below.
Production runsInspection hoursMachine hoursMaintenance
hoursProduction runs
runhourrun
Production runsInspection hoursMachine hoursMaintenance
hoursInspection hours
runhourhour
Production runsInspection hoursMachine hoursMaintenance
hoursMachine hours
runhourhour
Production runsInspection hoursMachine hoursMaintenance
hoursMaintenance hours
runhourhour
Plantwide versus Departmental Rates, Product-Costing Accuracy: Activity-Based Costing Ramsey Company produces speakers (
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