Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programm

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Snowden Industries Produces Two Electronic Decoders P And Q Decoder P Is More Sophisticated And Requires More Programm 1 (90.37 KiB) Viewed 12 times

Snowden Industries produces two electronic decoders, P and Q. Decoder P is more sophisticated and requires more programming and testing than does Decoder Q. Because of these product differences, the company wants to use activity-based costing to allocate overhead costs. It has identified four activity pools. Relevant information follows: Activity Pools Repair and maintenance on assembly machine Programming cost Software inspections Product testing Total overhead cost Expected activity for each product follows: Decoder P Decoder Q Total Number of Number of Programming Units Hours 16,800 2,700 39,200 2,300 56,000 5,000 Cost Pool Total $ 112,000 158,500 15,000 19,000 $ 304,500 Cost Driver Number of units produced Number of programming hours Number of inspections Number of tests Number of Number of Inspections Tests 304 1,120 96 880 400 2,000 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow
Expected activity for each product follows: Decoder P Decoder Q Total Decoder P Decoder Q Total Number of Units 16,800 39,200 56,000 Required Direct Labor Hours Number of Programming Hours 2,700 2,300 5,000 Assume that before shifting to activity-based costing, Snowden Industries allocated all overhead costs based on direct labor hours. Direct labor data pertaining to the two decoders follow: 6,300 14,700 21,000 Number of Inspections 304 96 400 Number of Tests 1,120 880 2,000
a. Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base b. Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Complete this question by entering your answers in the tabs below. Required A Required B Compute the amount of overhead cost allocated to each type of decoder when using direct labor hours as the allocation base. Note: Round intermediate calculations to 2 decimal places. Round your answers to the nearest whole dollar amount. Decoder P Decoder Q Total Allocated Cost
Required A Required B Determine the cost per unit for overhead when using direct labor hours as the allocation base and when using ABC. Note: Round intermediate calculations and final answers to 2 decimal places. Method ABC Labor hours Cost per unit Decoder P Decoder Q < Required A Required B >