Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:

Rascon Parcel
Direct materials cost per unit $ 15 $ 8
Direct labor cost per unit $ 2.90 $ 3.80
Direct labor-hours per unit .20 .25
Number of units produced 20,000 41,000

These products are customized to some degree for specific customers.

Required:
1.
The company's manufacturing overhead costs for the year are expected to be $299,250. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.)

2.
Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

Rascon Parcel Total
Engineering design time (in hours) 4,400 4,400 8,800
Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

Question

14-02-2020
Business

contestada

Harrison Company makes two products and uses a traditional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:

Rascon Parcel
Direct materials cost per unit $ 15 $ 8
Direct labor cost per unit $ 2.90 $ 3.80
Direct labor-hours per unit .20 .25
Number of units produced 20,000 41,000

These products are customized to some degree for specific customers.

Required:
1.
The company's manufacturing overhead costs for the year are expected to be $299,250. Using the company's traditional costing system, compute the unit product costs for the two products. (Round your intermediate calculations and final answers to 2 decimal places.)

2.
Management is considering an activity-based absorption costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

Rascon Parcel Total
Engineering design time (in hours) 4,400 4,400 8,800
Compute the unit product costs for the two products using the proposed activity-based absorption costing system. (Round your intermediate calculations and final answers to 2 decimal places.)

Respuesta :

Otras preguntas

You are monitoring app performance by using Azure Monitor. You must edit and run queries using the data collected by Azure Monitor. Which two data types should

The number of cycles of a wave that passes a stationary point in one second is called its Select one: a. crest b. trough c. frequency d. wavelength

In an experiment to create a pendulum, each member of the group measured the length of the string to be a slightly different value. How do we describe these sma

Passage Chicago-based artist Elsa Muñoz's paintings that depict diverse subject matter from meditative portraits to moody landscapes are united by her use of st

identify the functions of oxytocin. select all that apply. multiple select question. triggers the breakdown of glycogen stimulates milk ejection from the mammar

I need help please help asap match them

which statement by the nurse explains the reason clients prescribed corticosteroid therapy for a chronic health problem develop frequent infections?

Sofia is a helper for the kindergarten class and is in charge of picking a video for their end-of-year party to choose which type of movie they would like best

The director of nursing has been observing staff interactions in a 20-bed coronary care unit. Based on her observations, which of the following staff members is

using one or more coins, how many different amounts of money can be made from a collection of coins that consists two pennies, one nickel and one dime?

Shahzaibfaraz Shahzaibfaraz · Answer 1 · 2020-02-15T16:36:46+01:00

Answer:

1. Rascon = $22.1 / unit

Parcel = $17.05 / unit

2. Rascon = $23.74 / unit

Parcel = $ 16.30 / unit

Explanation:

Total Labor Hours = 0.2 * 20000 + 0.25 * 41000 = 14250 Labor Hour

Overhead Absorption Rate (OAR) = 299250 / 14250 => $21 / Direct Labor Hour

1. Per unit cost

Rascon = DM + DL + Overheads

= 15 + 2.9 + (0.2 * 21) => $22.1

Parcel = 8 + 3.8 + (0.25 * 21) => $17.05

2.

New OAR (Labor Hours) = [(299250 / 2) / 14250] = $10.5 / Labour hour

OAR ( Engineering Hour) = [(299250 / 2) / 8800] = $17 / Engineering Hour

Engineering Hours per unit

Rascon = 4400 hours / 20000 units = 0.22 hours / unit

Parcel = 4400 hours / 41000 units = 0.1073 hours / unit rounded off to 0.11

Per unit cost

Rascon = 15 + 2.9 + (0.2 * 10.5) + ( 17 * 0.22 ) = $23.74

Parcel = 8 + 3.8 + (0.25 * 10.5) + ( 17 * 0.11 ) = $16.295

anthougo anthougo · Answer 2 · 2022-03-21T15:56:12+01:00

1. Using Harrison Company's traditional costing system, the computation of the unit product costs for the two products is as follows:

Rascon Parcel

Direct materials cost per unit $15.00 $8.00

Direct labor cost per unit $2.90 $3.80

Manufacturing overhead per unit 4.20 5.25

Total unit product costs $22.10 $17.05

2. Using Harrison Company's ABC costing system, the computation of the unit product costs for the two products is as follows:

Rascon Parcel

Direct materials cost per unit $15.00 $8.00

Direct labor cost per unit $2.90 $3.80

Manufacturing overhead (traditional) 2.10 2.63

Manufacturing overhead (ABC) 3.74 1.82

Total unit product costs $23.74 $16.25

What are the traditional and ABC costing systems?

The traditional costing system relies on the usage of a single plantwide predetermined overhead rate, like $21 per hour.

On the other hand, the ABC system ensures that the cost of each activity cost pool is assigned to the activities that consumed or caused the cost.

Data and Calculations:

Rascon Parcel Total

Direct materials cost per unit $ 15 $ 8

Direct labor cost per unit $ 2.90 $ 3.80

Direct labor-hours per unit .20 .25

Number of units produced 20,000 41,000

Direct labor hours 4,000 10,250 14,250

Expected manufacturing overhead for the year = $299,250

Manufacturing overhead per direct labor hour = $21 ($299,250/14,250)

Rascon Parcel Total

Direct materials cost per unit $ 15 $ 8

Direct labor cost per unit $ 2.90 $ 3.80

Direct labor-hours per unit .20 .25

Number of units produced 20,000 41,000

Direct labor hours 4,000 10,250 14,250

Manufacturing overhead per unit based on traditional = $10.50 ($149,6250/14,250)

Manufacturing overhead per unit based on ABC:

Rascon Parcel Total

Engineering design time (in hours) 4,400 4,400 8,800

Manufacturing overhead cost per design hour = $17.00 ($149,625/8,800

Total manufacturing overhead $74,800 $74,800 $149,600

Number of units produced 20,000 41,000

Unit manufacturing overhead $3.74 $1.82

Learn more about the ABC costing system at https://brainly.com/question/6654166