Problem 3-16A Contrasting ABC and Conventional Product Costs [LO3-2, LO3-3, LO3-4]
[The following information applies to the questions
displayed below.]
For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.40 hours of direct labor time per unit and only a small amount of machining. Manufacturing overhead costs are currently assigned to products on the basis of direct labor-hours. |
|
LEC 40 | LEC 90 | |||
Direct materials | $ | 30.00 | $ | 50.00 |
Direct labor (0.40 hours and 0.80 hours @ $15.00 per hour) | $ | 6.00 | $ | 12.00 |
Management estimates that the company will incur $912,000 in manufacturing overhead costs during the current year and 60,000 units of the LEC 40 and 20,000 units of the LEC 90 will be produced and sold. |
References
Section BreakProblem 3-16A Contrasting ABC and Conventional Product Costs [LO3-2, LO3-3, LO3-4]
1.
value:
1.00 points
Required information
Problem 3-16A Part 1
Required: | ||
1-a. |
Compute the predetermined overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor-hours. (Round your answer to 2 decimal places.) |
|
1-b. | Using this rate and other data from the problem, determine the unit product cost of each product. (Do not round intermediate calculations. Round your final answers to 2 decimal places.) |
1 a. Predetermined Overhead Rate | Estimated Overhead/Direct Labor Cost*100 | |
=912000/(6*60000+12*20000)*100 | ||
=912000/(360000+240000)*100 | ||
=152% of Direct Labor Cost | ||
1 b. | LEC40 | LEC90 |
Unit | 60000 | 20000 |
Direct Material | 1800000 | 1000000 |
Direct Labor | 360000 | 240000 |
Overheads (152% of Direct Labor) | 547200 | 364800 |
Total Cost | 2707200 | 1604800 |
Unit Cost | 45.12 | 80.24 |
Problem 3-16A Contrasting ABC and Conventional Product Costs [LO3-2, LO3-3, LO3-4] [The following information applies to...
Problem 4-16 Contrasting ABC and Conventional Product Costs [LO4-2, LO4-3, LO4.4) (The following information applies to the questions displayed below.) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture...
Required information Problem 4-16 Contrasting ABC and Conventional Product Costs (LO4-2, LO4-3, LO4-4) [The following information applies to the questions displayed below.) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit...
this picture has the information this picture is the question Problem 4-16 Contrasting ABC and Conventional Product Costs (L04-2, LO4-3, L04-4) (The following information applies to the questions displayed below) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become Increasingly popular. The LEC 90 is a more complex product, requiring...
Exercise 3-10 Contrasting ABC and Conventional Product Costs [LO3-2, LO3-3, LO3-4] Rocky Mountain Corporation makes two types of hiking boots—Xactive and Pathbreaker. Data concerning these two product lines appear below: Xactive Pathbreaker Direct materials per unit $ 63.80 $ 50.00 Direct labor cost per unit $ 17.20 $ 12.00 Direct labor-hours per unit 1.4 DLHs 1 DLHs Estimated annual production and sales 15,000 units 65,000 units The company has a conventional costing system in which manufacturing overhead is applied to...
For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.20 hours of direct labor...
Required information (The following information applies to the questions displayed below.) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the...
Required information [The following information applies to the questions displayed below.) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the...
For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.60 hours of direct labor...
For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.80 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the plant. The LEC 40 requires only 0.60 hours of direct labor...
Required information (The following information applies to the questions displayed below.) For many years, Thomson Company manufactured a single product called LEC 40. Then three years ago, the company automated a portion of its plant and at the same time introduced a second product called LEC 90 that has become increasingly popular. The LEC 90 is a more complex product, requiring 0.60 hours of direct labor time per unit to manufacture and extensive machining in the automated portion of the...