Homework Help Question & Answers

Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocatRequired: 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal pla

Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $27.90 per unit, while product B has been assigned $11.78 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power Activity Costs Cost Drivers $258,000 Setup hours 96,000 Pounds of materials 30,000 Kilowatt-hours Activity Driver Consumption 3,000 12,000 30,000 The following cost information pertains to the production of A and B, just two of Hakara's many products: Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours A 4,000 10,000 $23,000 $28,000 $40,000 $32,000 100 200 1,000 1,000 2,000 4,000
Required: 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.) Cost per Unit Product A Product B
0 0
Next > < Previous
ReportAnswer #1
Calculation of overhead costs assigned
Product A Product B
Cost Pool Costs Driver Consumption Activity Rate Driver Consumed Overhead Allocated Driver Consumed Overhead Allocated
Machine Setup        258,000                            3,000                  86                          100                           8,600                          200                         17,200
Materials handling           96,000                         12,000                    8                      1,000                           8,000                      1,000                           8,000
Electric Power           30,000                         30,000                    1                      2,000                           2,000                      4,000                           4,000
Total                         18,600                         29,200
Calculation of Unit cost
Product A Product B
Direct Material cost 23000 28000
Direct Labor Cost 40000 32000
Overhead cost 18600 29200
Total cost 81600 89200
Number of units 4000 10000
Unit Cost 20.4 8.92

B 1 Calculation of overhead costs assigned 2 3 Cost Pool 4 Machine Setup 5 Materials handling 6 Electric Power Costs 258000 9

Know the answer?
Add Answer of:
Hakara Company has been using direct labor costs as the basis for assigning overhead to its...
Your Answer: Your Name: What's your source?
Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions
  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $30.25 per unit, while product B has been assigned $6.97 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: points eBook Cost Pools Machine setup Materials handling Electric power Activity Costs...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $28.26 per unit, while product B has been assigned $11.09 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $22.86 per unit, while product B has been assigned $7.39 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $28.26 per unit, while product B has been assigned $11.09 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $23.76 per unit, while product B has been assigned $9.73 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Activity Costs Cost Drivers Activity Driver Consumption Machine setup $...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $10.80 per unit, while product B has been assigned $3.60 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power Activity Costs Cost Drivers...

  • Hakara Company has been using direct labor costs as the basis for assigning overhead to its...

    Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under th allocation system, product A has been assigned overhead of $21.86 per unit, while product B has been assigned $13.35 per unit. Management feels that an ABC system will prov and has collected the following cost pool and cost driver information: ide a more accurate allocation of the overhead costs Ac tivity Driver Consumption 4,000 14,000 36, 000 Activity Costs Cost...

  • Exercise 5-28 Activity-Based Costing [LO 5-2,5-3] Hakara Company has been using direct labor costs as the...

    Exercise 5-28 Activity-Based Costing [LO 5-2,5-3] Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $22.86 per unit, while product B has been assigned $7.39 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling...

  • Stanley Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost...

    Stanley Company has identified the following activities related to indirect production costs: Activity Activity Costs Cost Drivers Machine Setup $180,000 1,500 setup hours Materials Handling $50,000 12,500 pounds of materials Electric Power $20,000 20,000 kilowatt hours Stanley Company has obtained the following data concerning two products: Product 1 Product 2 Number of units produced 4,000 20,000 Direct materials cost $20,000 $25,000 Direct labor cost $12,000 $20,000 Number of setup hours 100 120 Pounds of materials used 500 1,500 Kilowatt-hours 1,000...

  • Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year:...

    Orange, Inc. has identified the following cost drivers for its expected overhead costs for the year: Expected Quantity 250 1,500 2,000 4,000 Expected Cost Overhead Item Cost Driver $ 59,500 Number of setups Setup costs Ordering costs Maintenance Power Total Overhead 49,000 Number of orders 138,000 Machine hours 29,500 Kilowatt hours $ 276,000 Total direct labor hours budgeted - 2,000 hours The following actual data applies to one of the products completed during the year: Product X Direct materials Direct...

Free Homework App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.