Question

Perdon Corporation manufactures safes-large mobile sales and large walk-in stationary bank sales. As part of its overhead to be allocated to each products. The information shown below relates to overhead budgeting process, Perdon is analysing the profitability of its two products. Part of this analysis invol Mobile Sales 210 Walk-In Safes Units planned for production Material moves per product line 300 310 Purchase orders per product line Direct labor hours per product line 440 810 340 1.710 The total estimated manufacturing overhead was $278.000. Under traditional costing which assigns overhead on the basis of direct labor hours, what amount of manufacturing overhead costs wesigned to Round 12.250 (1) One mobile sale $ per unit (2) One walk-in safe S e Textbook and Media The total estimated manufacturing overhead of $278.000 was comprised of $160.000 for material handling costs and $118.000 for purchasing activity costs. Under activity-based costing ABC Round answers to decimal pla What amount of materials handling costs are assigned to: lal One mobile safe 5 per unit One walk-in safe $ e Textbook and Media

Answer 1

Part 1
	Mobile Safes	Walk-in Safes	Total
Units Planned for production	210	48	258	units
Material moves	300	310	610	moves
Purchase order	440	340	780	orders
Direct labor hours	810	1710	2520	direct labor hours
Overhead rate per direct labor hours =$278,000 / 2,520 hours =$110.317460317 per direct labor hours
	Mobile Safes	Walk-in Safes
Direct labor hours	810	1710
Manufacturing cost allocated	$                           89,357.14	$                            1,88,642.86
Units Planned for production	210	48
Manufacturing cost per unit	$                                425.51	$                                 3,930.06
Part 2
	Mobile Safes	Walk-in Safes	Total
Units Planned for production	210	48	258	units
Material moves	300	310	610	moves
Purchase order	440	340	780	orders
Direct labor hours	810	1710	2520	direct labor hours
Material Handling cost per move =$160,000 / 610 moves =$262.29508197
Purchasing activity cost per order =$118,000 / 780 =$151.28205128
	Mobile Safes	Walk-in Safes	Total
Material moves	300	310	610
Material Handling cost per move	$                    262.29508197	$                        262.29508197
Material Handling cost	$                           78,688.52	$                               81,311.48	$                        1,60,000.00
Material Handling cost per unit	$                                374.71	$                                 1,693.99
Purchase order	440	340
Purchasing activity cost per order	$                    151.28205128	$                        151.28205128
Purchasing activity cost	$                           66,564.10	$                               51,435.90	$                        1,18,000.00
Purchasing activity cost per unit	$                                316.97	$                                 1,071.58
	Traditional Costing	Activity-Based Costing
Mobile Safe	$                                425.51	$                                    691.68
Walk-in Safe	$                             3,930.06	$                                 2,765.57