18 Pasternik Company produces and sells two products, Alpha and Zeta. The following information is...
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Accounting
18
Pasternik Company produces and sells two products, Alpha and Zeta. The following information is available relating to its setup activities:
Alpha
Zeta
Units produced
350
27,180
Batch size (units)
13
690
Total direct labor hours
1,390
52,860
Cost per setup
$2,840
$2,820
Use of activity-based costing would allocate the following amounts of setup cost to each unit (rounded to the nearest cent):
ABC
TC
A)
$6.16
$7.16
B)
$86.76
$8.54
C)
$88.76
$10.54
D)
$4.16
$5.16
E)
$46.46
$7.85
Assume the cost per setup remains at $2,820 but that the batch size for product Alpha is changed from 13 to 34 units per batch Using activity-based and a volume-based overhead costing that uses direct labor-hours to assign overhead, the amount of setup cost applied to each unit of product Alpha would be (rounded to the nearest cent):
21
The Long Term Care Plus Company has two service departments actuarial and premium rating, and two production departments marketing and sales. The distribution of each service department's efforts to the other departments is shown below:
FROM
TO
Actuarial
Rating
Marketing
Sales
Actuarial
0.0%
50.0%
20.0%
30.0%
Rating
29.0%
0.0%
43.7%
27.3%
The direct operating costs of the departments (including both variable and fixed costs) were as follows:
Actuarial
$69,000
Rating
$46,000
Marketing
$70,000
Sales
$81,000
The total cost accumulated in the marketing department using the step method is:
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