x e xc Lamine Inc Issued 20 D BSJC05 Practice Loa Cannect

x \\ e xc Lamine Inc. Issued 20 D BSJC05. Practice . Loa Cannect / tpx BSJC.O5: Practice-LO3 instructions I help- Revlew Question 13 (of 13) Score Thls Questian Seve &Subm; Note: This question will not be automatically graded It will be sent to your Instructor for review. 016 points Atima Company uses an overhead costing system based on direct labor hours for lts two products Xand Y. The company is considering adoptng an activity-based costing system, and collects the following Information for the month of ProductX 20,000 $5000 ProductY 2,000 $4000 $1000 oduction unns Direct meterlals oost per unit Overhead Total Activity Consumption Product X Cost pool Machine setup ProductY $60,000 40,000 90,000 1000 setups 100 arders 1,000 sq. teet 300 700 Focility rent 300 (1) Compute the unit manufacturing cost of each product under a volume-based costing system based on direct labor hours. 2) Compute the unit manufacturing cost of oach product under the activity based costing system 11-10 AM Type here to search \'da ^

Solution

Answer to Part 1.

Unit Manufacturing Cost = Direct Materials + Direct Labor + Overhead Cost

Product X:

Total Overhead Cost = $60,000 + $40,000 + $90,000 = $190,000
Direct Labor Hours applied to Product X = 34,000
Total Overhead Cost applied to Product X = 190,000 * 34,000 / 40,000
Total Overhead Cost applied to Product X = $161,500

Overhead Cost per Unit = 161,500 / 20,000 = $8.075

Unit Manufacturing Cost = $50 + $10 + $8.075
Unit Manufacturing Cost = $68.075

Product Y:

Total Overhead Cost = $60,000 + $40,000 + $90,000 = $190,000
Direct Labor Hours applied to Product Y = 6,000
Total Overhead Cost applied to Product Y = 190,000 * 6,000 / 40,000
Total Overhead Cost applied to Product Y = $28,500

Overhead Cost per Unit = 28,500 / 2,000 = $14.25

Unit Manufacturing Cost = $40 + $10 + $14.25
Unit Manufacturing Cost = $64.25

Answer to Part 2.

Unit Manufacturing Cost = Direct Materials + Direct Labor + Overhead Cost

Product X:

Overhead Cost = Machine Setup Cost + Engineering Change order Cost + Facility Rent Cost

Machine Set-Up Cost consumed by Product X = 60,000 * 300 / 1000 = $18,000
Engineering Change Cost consumed by Product X = 40,000 * 20 / 100 = $8,000
Facility Rent Cost consumed by Product X = 90,000 * 300 / 1000 = $27,000

Overhead Cost = $18,000 + $8,000 + $27,000 = $53,000
Unit Overhead Cost = 53,000/ 20,000 = $2.65

Unit Manufacturing Cost = $50 + $10 + $2.65
Unit Manufacturing Cost = $62.65

Product Y:

Overhead Cost = Machine Setup Cost + Engineering Change order Cost + Facility Rent Cost

Machine Set-Up Cost consumed by Product X = 60,000 * 700 / 1000 = $42,000
Engineering Change Cost consumed by Product X = 40,000 * 80 / 100 = $32,000
Facility Rent Cost consumed by Product X = 90,000 * 700 / 1000 = $63,000

Overhead Cost = $42,000 + $32,000 + $63,000 = $137,000
Unit Overhead Cost = 137,000/ 2,000 = $68.50

Unit Manufacturing Cost = $40 + $10 + $68.50
Unit Manufacturing Cost = $118.50