A B C D E F Expected Activity 550000 a What is the tradition

A

B

C

D

E

F

Expected Activity

$550,000

(a)

What is the traditional unit product cost for the Deluxe model after this change?

What is the ABC unit product cost for the Deluxe model after this change? (Round your intermediate calculations and final answer to 2 decimal places.)

	A	B	C	D	E	F
1	Chapter 3: Applying Excel
2
3	Enter a formula into each of the cells marked with a ? below
4	Review Problem: Activity-Based Costing
5
6	Data
7		Deluxe	Tourist
8	Annual sales in units	2,000	10,000
9	Direct materials per unit	$25	$17
10	Direct labor-hours per unit	5	4
11
12	Direct labor rate	$12	per DLH
13
14		Estimated
15		Overhead	Expected Activity
16	Activities and Activity Measures	Cost	Deluxe	Tourist	Total
17	Labor related (direct labor-hours)	$ 80,000	10,000	40,000	50,000
18	Machine setups (setups)	150,000	3,000	2,000	5,000
19	Production orders (orders)	70,000	270	230	500
20	General factory (machine-hours)	250,000	12,000	28,000	40,000
21		$550,000
22	(a) What is the traditional unit product cost for the Deluxe model after this change? (c) What is the ABC unit product cost for the Deluxe model after this change? (Round your intermediate calculations and final answer to 2 decimal places.)

Solution

CALCULATION OF UNIT COSTING AS PER ABC METHOD Particulars Delux Tourist (2, 000 Units) (10,000 Units) Direct Material $25 $17 Direct Labour $60 $48 (5 Hrs X $ 12) (4 Hrs X $ 12) Overhead Cost: Labor related (direct labor-hours) $8.0 $6.4 Machine setups (setups) $45.0 $6.0 Production orders (orders) $18.9 $3.2 General factory (machine-hours) $37.5 $17.5 Total Cost Per unit $194.4 $98.1 Calculation of the Cost Driver Rate Per Unit Per Product Total Activity of Delux Rate of Activity Total Activity \"/\" By No. of Units Rate Per unit Direct Labour Related = $80,000 10000 $1.6 $16,000.0 2000 $8.0 Divide by \" / \" total Activity = 50000 Total Activity of Tourist Activity Rate $1.6 40000 $1.6 $64,000.0 10000 $6.4 Total Cost $80,000.0 Machiene Related = $1,50,000.0 Total Activity of Delux Rate of Activity Total Activity \"/\" By No. of Units Rate Per unit Divide by \" / \" 3000 $30.0 $90,000.0 2000 $45.0 total Activity = 5000 Activity Rate $30.00 Total Activity of Tourist 2000 $30.0 $60,000.0 10000 $6.0 Total Cost $1,50,000.0 Production Orders = $70,000.0 Total Activity of Delux Rate of Activity Total Activity \"/\" By No. of Units Rate Per unit Divide by \" / \" 270 $140.0 $37,800.0 2000 $18.9 total Activity = 500 Activity Rate $140.00 Total Activity of Tourist 230 $140.0 $32,200.0 10000 $3.2 Total Cost $70,000.0 General Factory Machiene - Hours $2,50,000.0 Total Activity of Delux Rate of Activity Total Activity \"/\" By No. of Units Rate Per unit Divide by \" / \" 12000 $6.3 $75,000.0 2000 $37.5 total Activity = 40000 Activity Rate $6.25 Total Activity of Tourist 28000 $6.3 $1,75,000.0 10000 $17.5 Total Cost $2,50,000.0