Question

Use the Following Information to Answer the Questions Below • Information for Our 2 TOP Products, the Mountain Bike and BMX Bike, are shown Below: • We Need to Compare Traditional Costing to ABC Costing using the Information Below . Traditional Costing uses Direct Labor Hours as the Cost Driver for ALL of the Manufacturing Overhead Amounts ABC Uses 3 Cost Pools to Allocate Overhead Amounts to Products and Jobs. • Round All Total Amounts to the Nearest Dollar and Round Per Unit or Per Hour Amounts to Nearest Penny. ESTIMATED Manufacturing Overhead Costs and ESTIMATED Cost Driver Amounts for the YEAR were as follows: 1. Machinery Costs = $300,000 based on Machine Hours 2. Assembly Costs = $200,000 based on Assembly Hours, 3. Other Factory Overhead Costs = $100,000 based on Direct Lab

Answer 1

Answer:

$ Answer-1: Machinery costs Assembly costs Other factory overhead costs Total manufacturing overhead cost 3,00,000 2,00,000 1,00,000 6,00,000 Estimated direct labor hours Estimated MOH Rate using Traditional Costing = 5000 120.00 $ Answer-2: Cost to make All Mountain Bikes using Traditional Costing = |(800 x $120) $ 96,000 Answer-3: Cost to make one mountain bike using Traditional Costing = ($96,000 / 1,000) $ 96.00 Answer-4: Cost to make All BMX Bikes using Traditional Costing = Answer-5: Cost to make one BMX bike using Traditional Costing = ($144,000 / 2,000) $ 72.00 Answer-6: ABC allocation rate for machine cost = ($300,000/ 1,500) $ 200.00 per machine hour Answer-7: ABC allocation rate for assembly cost = ($200,000 / 4,000) $ 50.00 per assembly hour Answer-8: ABC allocation rate for other factory OH cost = ($100,000 / 5,000) $ 20.00 per direct labor hour