Required information Cain Components manufactures and distributes various plumbing products used in homes and other buil

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Required information Cain Components manufactures and distributes various plumbing products used in homes and other buildings. Over time, the production staff has noticed that products they considered easy to make were difficult to sell at margins considered reasonable, while products that seemed to take a lot of staff time were selling well despite recent price increases. A summer intern has suggested that the cost system might be providing misleading information. The controller decided that a good summer project for the intern would be to develop, in one self-contained area of the plant, an alternative cost system with which to compare the current system. The intern identified the following cost pools and, after discussion with some plant personnel, appropriate cost drivers for each pool. There were: Coat Pools Receiving Manufacturing Machine setup Shipping Conta $ 600,000 5,500,000 900,000 1,000,000 Activity Drivers Direct material cost Machine-hours. Production runa Units shipped In this particular area, Cain produces two of its many products: Standard and Deluxe. The following are data for production for the latest full year of operations. Total direct material costs Total direct labor costs Total machine-hours Total number of setups Total pounds of material Total direct labor-hours Number of units produced and shipped Products Standard $165,000 $650,000 118,000 155 10,000 6,800 16,000 Deluxe $235,000 $410,000 132,000 45 17,000 4,550 9,000

Number of units produced and shipped Required: a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? b. The intern suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used? Complete this question by entering your answers in the tabs below. Required A Direct costs Overhead Required Total costs Number of units Unit cost The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? (Do not round intermediate calculations and round "Unit cost" answers to 2 decimal places.) Standard $ 0 S 0 Deluxe 16,000 0 0 Required A 1,350 9,000 Required B >

a. The current cost accounting system charges overhead to products based on machine-hours. What unit product costs will be reported for the two products if the current cost system continues to be used? b. The intern suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used? Complete this question by entering your answers in the tabs below. Required A Required B The intern suggests an ABC system using the cost drivers identified above. What unit product costs will be reported for the two products if the ABC system is used? (Do not round intermediate calculations and round "Unit cost" answers to 2 decimal places.) Direct Costs Overhead: Receiving Manufacturing Machine setup Shipping Total costs Number of units Unit cost Standard $ 0 $ 0 Deluxe 0 0

The intern decides to look more closely at the manufacturing activity and determines that it can be broken down into two activities: production and engineering, Production covers the costs of ongoing manufacturing while engineering includes those activities dealing with engineering changes, design modifications, and so on. The costs attributed to production are $13,020,000 and the costs attributed to engineering are $5,796,000. After discussion with plant engineers, the intern decides that the best cost driver for engineering is setups, because most of the work arises from changes in the way the product is run. Required: a-1. Compute the totals of the cost driver rates shown below. a-2. What unit product costs will be reported for the two products if the revised ABC system is used? Complete this question by entering your answers in the tabs below. Req A1 Reg A2 Compute the totals of the cost driver rates shown below. (Round intermediate calculations and Manufacturing" answer to 21 decimal places.) Receiving Production Engineering Machine setup Shipping % of material dollars per machine-hour per setup per setup per unit

Required: a-1. Compute the totals of the cost driver rates shown below. a-2. What unit product costs will be reported for the two products if the revised ABC system is used? Complete this question by entering your answers in the tabs below. Reg A1 What unit product costs will be reported for the two products if the revised ABC system is used? (Round "Unit cost" answers to 2 decimal places.) Direct Costs Overhead: Reg A2 Receiving Production Engineering Machine setup Shipping Total costs Number of units Unit cost + Standard Deluxe Ben A