Question

Week 1 CNOW Assignment Calculator Comparing Two Products under Traditional and Activity-Based Costing Compare two projects under development by the same company. The following are a few aspects of each product's development process relevant to costs. Products Requires 3,200 hours of testing Product T Requires 800 hours of testing Requires 2,100 units of computing power Requires 4,900 units of computing power Requires 25 developer hours to implement Requires 75 developer hours to implement Cost Items Testing: Computing power: Developer hourly cost: Cost of Each Activity $28,000 $42,000 $11 per hour Traditional Costing Traditional costing would take the proportion of a direct cost, such as direct labor hours, and use it as the basis for allocating overhead costs, such as computing power and testing. In the following table, use developer hours as the basis for assigning overhead costs (computing and developer costs) to each project. If required, round your answers to the nearest dollar. Products Percentage of developer hours 25% Testing cost $ 7,000 Computing cost $ 10,500 Product T Percentage of developer hours 75% Testing cost $ 21,000 Computing cost $31,500 Developer cost $ 325 Total cost $ 53,325 Developer cost 275 $ $ Total cost 17,775
I need help figuring out part two

Answer 1

The answer has been presented in the supporting sheet. For detailed answer refer to the supporting sheet.

Answer As per details given in question part one has already been solved and part two need to be solved, For part two firstly we have to calculate 3 the overheads rate per activity Cost Item Cost No. of activity Overhead rate Testing Cost 28000 4000 (3200+800) 7000 (4900+2100) 9 Computer Cost Products No. of activity Overheads of s assigned 3200 22400 (7*3200) 4900 29400 (6*4900) 25 275 (11*25) 52075 6 Product T No. of activity Overheads oft assigned 1 800 5600 (7*800) 2100 12600 (6*2100) 75 825 (11*75) 19025 42000 Developer Cost 11 Total 15 Thus the final answer Product S Testing Cost Computer Cost Developer Cost Total Cost 18 22400 29400 275 52075 Product T Testing Cost Computer Cost Developer Cost Total Cost 5600 12600 825 19025 79