Extracts from cost information of Hebar Corp.: Simple L3 Pack Complex L7 Pack Total Setup cost...
Extracts from cost information of Hebar
Corp.:
|
Simple L3 Pack |
Complex L7 Pack |
Total |
|
| Setup cost allocated using direct
laborminus−hours |
$ 19 comma 450$19,450 |
$ 10 comma 550$10,550 |
$ 30 comma 000$30,000 |
| Setup cost allocated using
setupminus−hours |
$ 13 comma 600$13,600 |
$ 16 comma 400$16,400 |
$ 30 comma 000$30,000 |
Assuming that
setupminus−hours
is considered a more effective cost drive for allocating setup costs than direct
laborminus−hours.
Which of the following statements is true ofHebar's setup costs under traditional costing?
A.
L3 pack is undercosted by $ 5 comma 850$5,850
B.
L7 pack is undercosted by $ 5 comma 750$5,750
C.
L7 pack is overcosted by $ 5 comma 850$5,850
D.
L3 pack is overcosted by $ 5 comma 850
Homework Answers
| L3 pack | 5850 | Overcosted | =19450-13600 |
| L7 Pack | 5850 | Undercosted | =16400-10550 |
| L3 pack is overcosted by $ 5,850 |
| Option D is correct |
Add Answer to:
Extracts from cost information of Hebar
Corp.:
Simple L3 Pack
Complex L7 Pack
Total
Setup cost...
Extracts from cost information of Hebar Corp.: Simple L3 Pack Complex L7 Pack Total Setup cost...
Extracts from cost information of Hebar Corp.: Simple L3 Pack Complex L7 Pack Total Setup cost allocated using direct laborminus−hours $ 19 comma 300$19,300 $ 10 comma 700$10,700 $ 30 comma 000$30,000 Setup cost allocated using setupminus−hours $ 13 comma 200$13,200 $ 16 comma 800$16,800 $ 30 comma 000$30,000 Assuming that setupminus−hours is considered a more effective cost drive for allocating setup costs than direct laborminus−hours. Which of the following statements is true ofHebar's setup costs under traditional costing? A....
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