Enemia Company uses an overhead costing system based on direct labor hours for its two...
80.2K
Verified Solution
Link Copied!
Question
Accounting
Enemia Company uses an overhead costing system based on direct labor hours for its two products A and B. The company is considering adopting an activity-based costing system, and collects the following information for the month of October.
Product A Product B
Production units 12,000 6,000
Direct materials cost per unit $50.00 $40.00
Direct labor cost per hour $12.00 $12.00
Direct labor hours 30,000 10,000
Overhead Overhead Total Activity Consumption
Cost pool cost activity Product A Product B
Machine setup $120,000 600 setups 200 400
Engineering change order $110,000 220 orders 120 100
Facility rent $120,000 2,000 sq. feet 1300 700
Required:
(1) Compute the unit manufacturing cost of each product under a volume-based costing system based on direct labor hours.
(2) Compute the unit manufacturing cost of each product under the activity-based costing system.
Answer & Explanation
Solved by verified expert
Get Answers to Unlimited Questions
Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!
Membership Benefits:
Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
