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Business, 04.11.2019 21:31 nataliaaaaa10

For many years, thomson company manufactured a single product called a lec 40. then three years ago, the company automated a portion of its plant and at the same time introduceda second product called a lec 90 that has become increasingly popular. the lec 90 is a more complex product, requiring 0.50 hour of direct labor time per unit to manufacture andextensive machining in the automated portion of the plant. the lec 40 requires only 0.30 hour 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. despite the growing popularity of the company’s new lec 90, profits have been declining steadily. management is beginning to believe that there may be a problem with the company’s costing system. material and labor costs per unit are as follows: lec 40 lec 90 direct materials $50.00 $100.00 direct labor (@ $10.00 per hour) $3.00 $5.00 direct labor time per unit hard code from data above management estimates the following for the current year: manufacturing overhead costs $ 665,000 units produced and sold 25,000 5,000 required (complete the templates by filling in the highlighted cells) complete the templates for part 1, 2 and 3 by filling in the highlighted cells. do not hard code the amounts. you must link to the data given and enter formulas. format all number cells as accounting. use the round function and show 2 places after the decimal where appropriate. round all rates and per unit amounts to the penny. use the sum function for totals. part 1 compute the predetermined manufacturing overhead rate assuming that the company continues to apply manufacturing overhead cost on the basis of direct labor-hours. using this rate and other data from the problem, determine the unit product cost of each product. part 2 management is considering using activity-based costing to apply manufacturing overhead cost to products for external financial reports. the activity-based costing system would have the following four activity cost pools: activity cost pool activity allocation base estimated overhead cost maintaining parts inventory number of part types $ 60,000 processing purchase orders number of purchase orders 145,000 quality control number of tests run 285,000 machine related machine-hours 175,000 $ 665,000 expected activity activity pool lec 40 lec 90 total number of part types 500 700 1,200 number of purchase orders 2,600 1,400 4,000 number of tests run 5,550 9,450 15,000 machine-hours 3,000 7,000 10,000 determine the activity rate (i. e., predetermined overhead rate) for each of the four activity cost pools. part 3 using the activity rates you computed in part (2) above, do the following: a. determine the total amount of manufacturing overhead cost that would be applied to each product using the activity-based costing system. after these totals have been computed, determine the amount of manufacturing overhead cost per unit of each product. b. compute the unit product cost of each product. check figures: part 1: lec 40 total unit cost 72.95 lec 90 total unit cost 138.25 part 3: lec 40 total unit cost 64.09 lec 90 total unit cost 182.56

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