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Workflow Systems specializes in servers for work group o-commerce, and Thus, budgets only overhead costs for each activity Partner data follow antaris resource paring (ERP) aplication. The conna Cick on the con los system as we direct cost categones del mes de abor Overhead is alocated to jobs at the single rate of $27 per direct labor hour A Wontowym Pas been awarded to new contracts that will be produced at tik force headed by Worow's CFO recedy designed to ABC system with AB. Bugtatago the contracts follow fouettel The Competits the current walls we direct cont mick the icon to view the contact information Read the requirements Requirement 1. Compute the product cost per unit for each ob using the original cesting system with too direct cost categories and a sogle overhead allocation JobA Job Direct Direct labor Dread allocated Total cost Divico by number of units POSE couper Requirement 2. Suppose Workfow System adept the ABC system Compute the product cost per unit for eaching ABC Begin by computing the product cost peruntuning AC for the compute the produkt coat per unit for Job Board your are to the cont Job Job Die mode Director Alodowe th Divide by number onts Product cost per unit Requirements which cong system metely in the cost of the resources consumed to produce them? Explain First compute each input perunt and compute the percentage of overhead assigned to Job Acompared to do Mund your numbers to we decimal aces, xXx Round your percentage to the nearest whole percent JobA Job ob Al Job ? Dibor hours Pats per unit Seps per unit Asseig hours per Shipment per unit The single male locales al verhead cos based on Per treats you calculated in the preceding step, the single system assigned to each unit of As The active based costing system alocatos overhead costs based on a unit astially consumes more of most owerhead resources than a sunt of single route de and overcos The data you have calculated in the previous stop shows that The ABC system recortes the actual resource consumption. The The activity based costing system corate then the singerste system in assigning the cost of the resources each consume Requirement 4. A dependable company has offered to produce both yostor Vorflow for 56.000 per output unit Wandlow mas outsource buy from the outside company) Job A only.Job only, or to jobs. Which course of action will Workflow's managers take they tase their decision on the original system? 8C wyslem cos? Which course of action will yield more income? Explain a) Workflow Systeme managers as the decision on original system costs, they wil outsource b) Worldtow Systems managers base their des ABC system costs, they wil outsource Data Table Cost Allocation Rate $ 1.10 Activity Allocation Base Materials handling ... Number of parts Machine setup Number of setups Assembling . Assembling hours Shipping Number of shipments $ 470.00 $ 120.00 $ $ 1,280.00 Print Done 0 Data Table X Job A Job B Number of parts 17,000 4,000 6 2 Number of setups Number of assembling hours Number of shipments 1,700 400 1 1 Total direct labor hours 9,900 880 Number of output units 100 20 Direct materials cost $ 195,700 $ 100,640 Direct labor cost $ 155,000 $ 25,000 Print Done Workflow Systems specializes in servers for work-group, e-commerce, and Thus, it budgets only overhead costs for each activity. Pertinent data follow enterprise resource planning (ERP) applications. The company's original job cost ? (Click on the icon to view ABC system data.) system has two direct cost categories: direct materials and direct labor. Overhead is allocated to jobs at the single rate of $27 per direct labor hour. A Workflow Systems has been awarded two new contracts that will be produced as task force headed by Workflow's CFO recently designed an ABC system with Job A and Job B. Budget data relating to the contracts follow: four activities. The ABC system retains the current system's two direct cost (Click the icon to view the contract information) categories Read the requirements. Requirement 1. Compute the product cost per unit for each job using the original costing system (with two direct cost categories and a single overhead allocation rate) Job A Job B Direct materials Direct labor Overhead allocated Total cost Divide by number of units Product cost per unit Requirement 2. Suppose Workflow Systems adopts the ABC system Compute the product cost per unit for each job using ABC. Begin by computing the product cost per unit using ABC for Job A, then compute the product cost per unit for Job B. (Round your answer to the nearest cent.) Job A Job B Direct materials Direct labor Allocated overhead Materials handling Machine setup Assembling Shipping Total cost Divide by number of units Product cost per unit % % Requirement 3. Which costing system more accurately assigns to jobs the costs of the resources consumed to produce them? Explain. First, compute each input per unit and compute the percentage of overhead assigned to Job A compared to Job B. (Round your numbers to two decimal places, XXX. Round your percentage to the nearest whole percent) Job A Job B % (Job A/ Job B) Direct labor hours per unit Parts per unit % Setups per unit Assembling hours per unit Shipment per unit % The single rate allocates all overhead costs based on Per the data you calculated in the preceding step, the single rate system assigned to each unit of Job Ais % of the overhead cost assigned to each unit of Job B. The activity-based costing system allocates overhead costs based on The data you have calculated in the previous step shows that a unit of actually consumes more of most overhead resources than a unit of The ABC system recognizes the actual resource consumption. The single rate undercosts and overcosts The activity-based costing system is accurate than the single-rate system in assigning the costs of the resources each job consumes. Requirement 4. A dependable company has offered to produce both jobs for Workflow for $6,000 per output unit. Workflow may outsource (buy from the outside company) Job A only.Job B only, or both jobs. Which course of action will Workflow's managers take if they base their decision on (a) the original system? (b) ABC system costs? Which course of action will yield more income? Explain. a) If Workflow Systems' managers base their decision on original system costs, they will outsource b) I Workflow Systems' managers base their decision on ABC system costs, they will outsource

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