EMD Corporation manufactures two products, Product S and ProductW. Product W is of fairly recent origin, having been developed asan attempt to enter a market closely related to that of Product W.Product W is the more complex of the two products, requiring 3hours of direct labor time per unit to manufacture compared to 2hour of direct labor time for Product S. Product W is produced onan automated production line.
Overhead is currently assigned to the products on the basis ofdirect-labor-hours. The company estimated it would incur $1,072,715in manufacturing overhead costs and produce 15,000 units of ProductW and 75,000 units of Product S during the current year. Unit costfor materials and direct labor are:
| Product S | Product W |
| Direct material | $ | 18 | | $ | 30 | |
| Direct labor | | 11 | | | 15 | |
|
Required:
a-1. Compute the predetermined overhead rate under the currentmethod of allocation.
a-2. Determine the unit product cost of each product for thecurrent year.
b. The company's overhead costs can be attributed to four majoractivities. These activities and the amount of overhead costattributable to each for the current year are given below:
| | Total Activity |
| Activity Cost Pool | Total Cost | Product S | Product W | Total |
| Machine setups required | $ | 531,570 | 1,370 | 2,400 | 3,770 |
| Purchase orders issued | | 53,703 | 508 | 155 | 663 |
| Machine-hours required | | 301,280 | 7,960 | 10,870 | 18,830 |
| Maintenance requests issued | | 186,162 | 711 | 922 | 1,633 |
| $ | 1,072,715 | | | |
|
Using the data above and an activity-based costing approach,determine the unit product cost of each product for the currentyear.
predetermined overhead rate?
Determine the unit product cost of each product for the currentyear. (Round your answers to 2 decimal places.)
S?
W?
Using the data above and an activity-based costing approach,determine the unit product cost of each product for the currentyear.
S?
W?
