090 points E414 ign ning Cost Using Traaitional System ABC S

0.90 points E4-14 ign ning Cost Using Traaitional System, ABC System [LO 4-1, 4-3, 4-4, 4-5 Julio produces two types of calculator, standard and deluxe. The company is currently using a traditional costing system with machine hours as the cost driver but is consideri activity-based costing. In preparing for the possible switch, Julio has identified two cost pools: materials handling and setup. The collected data follow 25,000 550 80 of 30,000 l moves Number of setups Total estimated overhead costs are $303,560, of which $140,000 is assigned to the material handling cost pool and $163,560 is assigned to the setup cost pool Required . Calculate the overhead assigned to each product using the traditional cost system. (Round the overhead rate to four decimal places and round your final answer to the ne whole dollar amount.) 2. Calculate the overhead assigned to each product using ABC. (Do not round intermediate calculations.) Assign

Solution

1 Overhead rate =303560/(25000+30000)= 5.5193 Overhead assigned: Standard model 137983 =25000*5.5193 Deluxe model 165579 =30000*5.5193 2 Activity rates: Material moves 100 =140000/(550+850) Setup 282 =163560/(500+80) Overhead assigned: Standard model 77560 =(550*100)+(80*282) Deluxe model 226000 =(850*100)+(500*282)