Question

Check my work Exercise 4-4 Contrast ABC and Conventional Product Costs [LO4-4] Pacifica Industrial Products Corporation makes two products, Product H and Product L. Product H is expected to sell 48,000 units next year and Product L is expected to sell 9,600 units. A unit of either product requires 0.7 direct labor-hours. points Skipped The company's total manufacturing overhead for the year is expected to be $3,427,200. eBook Required: 1-a. The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? 1-b. Compute the total amount of overhead cost that would be applied to each product. 2. Management is considering an activity-based costing system and would like to know what impact this change might have on product costs. For purposes of discussion, it has been suggested that all of the manufacturing overhead be treated as a product- level cost. The total manufacturing overhead would be divided in half between the two products, with $1,713,600 assigned to Product Hand $1,713,600 assigned to Product L. If this suggestion is followed, how much overhead cost per unit would be assigned to each product? Hint References Complete this question by entering your answers in the tabs below. Req 1A Reg 1B Reg 2 The company currently applies manufacturing overhead to products using direct labor-hours as the allocation base. If this method is followed, how much overhead cost per unit would be applied to each product? (Round your answers to 2 decimal places.) Product Product L Overhead cost per unit Req1A Req 1B >

Answer 1

Date 1(a) & (6) showing I Statiment C allocation of Products Manufacturing of Total Exacted Units A Direct Labour his Reg. Total labour bes 48000 0.7 33600 9600 0.7 6720 I 34.27200 I Total Manus. 0/4 (1) .. p.u cost of many olH 59.5 16 To to amt off Many of 2856000 59.5 571200 3427200 If Activity Basid costing follows HL Mand D2 Albindid 1713600 1713600 b. o cont of Man ola 357 178.5