Ellix Company manufactures two models of ultrahigh fidelity

Ellix Company manufactures two models of ultra-high fidelity speakers, the X200 model and the X99 model. Data regarding the two products follow: Product X200 X99 Direct Labor-Hours 0.2 DLH per unit 0.4 DLH per unit Annual Production 16,000 units 46,000 units Total Direct Labor-Hours 3,200 DLHs 18,400 DLHs 21,600 DLHs Additional information about the company follows: a. Model X200 requires $31 in direct materials per unit, and model X99 requires $24 b. The direct labor rate is $40 per hour c. The company has always used direct labor-hours as the base for applying manufacturing overhead cost to products. equipment. absorption costing to apply manufacturing overhead cost to products. Three activity cost pools have d. Model X200 is more complex to manufacture than model X99 and requires the use of special e. Because of the special work required in (d) above, the company is considering the use of activity-based been identified as follows: Estimated Total Activi Estimated Total Cost X200 X99 Total Activity Cost Pool Machine setups Special processing General factory Activity Measure Number of setups Machine-hours Direct labor-hours 96 144 0 S 180,000 240 990 1,296,000 3,200 18,400 21,600 386,100 990 S 1,862,100 Required 1. Assume that the company continues to use direct labor-hours as the base for applying overhead cost to products. a. Compute the predetermined overhead rate. (Round \"pre-determined overhead rate\" to nearest dollar.) etermined overhead rateS 86 per DLH

Solution

1b)

2a)

[750*96]+[390*990]+[60*3200]

72000+ 386100+ 192000

650100

[750*144]+[390*0]+[60*18400]

108000+0+1104000

1212000

B)

	X200	X99
Overhead applied	86*3200=275200	86*18400=1582400
unit cost	275200/16000=$ 17.2 per unit	1582400/46000=$ 34.40