John Corporation to activitybased costing John produces hour

John Corporation to activity-based costing John produces hours of direct labor and Product Y company has provided the following data concerningá Product X and Product Y. Product X requires 1.75 requires 1 direct labor hour to produce a single unit. The uses a traditional costing method to allocate overhead but wants to convert costing system: Total Cost $231.000 Activ ity Cost Pools (and Activity Measures) Machine related (machine-bours)... Batch setup (setups) General factory (direct labor-hours). $339,000 S193,200 Total Activity Product X Product Y Total 10,000 10,000 14,000 Activity Cost Pools Machine related (machine hours) 7,000 6,000 General factory (direct-labor hours)... 3,50010,500 3,000 Batch setup (noumber of setups.... 4,000 2u. The predetermined overhead rate per direct-labor hour under the traditional costing system is closest toc A)S 42.30 B) $ 109.03 C)s 54.51 D) None of the above 25. The predetermined overhead rate for machine related cost group under activity based costing system is: A) $23.10 B) $13.80 C) $33.90 D) None of the above 26. The predetermined overhend rate for batch setup cost group under an activity based costing A) S23.10 B)$13.80 C)$33.90 D) None of the above

Solution

1 Traditional costing Based on direct labor hours Total manufacturing cost 763200 Total direct labor hours 14000 Predetermined OH rate 54.51 Correct answer for 24 is 54.51 part C Product X Product Y Predetermined OH rate 54.51 54.51 Direct Labor hours 3500 10500 Manufacturing overheads 190800 572400 Number of units 2000 10500 Unit cost 95.4 54.51 Correct answer 30 Correct answer 31 2 ABC system Estimated cost Cost driver Cost per driver Machine related 231000 10000 23.1 Correct answer for 25 part A Batch setup 339000 10000 33.9 Correct answer for 26 part C General factory 193200 14000 13.8 Correct answer for 27 part B 763200 ABC system Cost driver Product X Total cost manufacturinf setups 23.1 3000 69300 machine processing 33.9 4000 135600 product shipping 13.8 3500 48300 Total overheads 253200 Number of units 2000 Cost per unit 126.60 Correct answer for 28 part C ABC system Cost driver Product Y Total cost manufacturinf setups 23.1 7000 161700 machine processing 33.9 6000 203400 product shipping 13.8 10500 144900 Total overheads 510000 Number of units 10500 Cost per unit 48.57 Correct answer for 29 part A