Question

Sheffield Corporation manufactures safes—large mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Sheffield is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be assigned to each product line. The information shown below relates to overhead.

		Mobile Safes			Walk-in Safes
Units planned for production		200			50
Material moves per product line		300			200
Purchase orders per product line		450			350
Direct labor hours per product line		800			1,700

(a)

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Your answer is correct.

The total estimated manufacturing overhead was $264,000. Under traditional costing (which assigns overhead on the basis of direct labor hours), what amount of manufacturing overhead costs are assigned to: (Round answers to 2 decimal places, e.g. 12.25.)

(1)		One mobile safe		$enter a dollar amount per unit rounded to 2 decimal places	per unit
(2)		One walk-in safe		$enter a dollar amount per unit rounded to 2 decimal places	per unit

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(b1)

The total estimated manufacturing overhead of $264,000 was comprised of $164,000 for materials handling costs and $100,000 for purchasing activity costs. Under activity-based costing (ABC): (Round answers to 2 decimal places, e.g. 12.25.)

What amount of materials handling costs are assigned to:

(a)		One mobile safe		$enter a dollar amount each rounded to 2 decimal places	each
(b)		One walk-in safe		$enter a dollar amount each rounded to 2 decimal places	each