Prepare a schedule assigning each activity\'s overhead cost pool to each product
ID: 2417956 • Letter: P
Question
Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Include a computation of overhead cost per unit, rounding to the nearest cent.) Cost assigned—H.M. $1,069,300
and Compute the total cost per unit for each product under ABC.
Prepare a schedule assigning each activity's overhead cost pool to each product based on the use of cost drivers. (Include a computation of overhead cost per unit, rounding to the nearest cent.) Cost assigned—H.M. $1,069,300
Expected Use of Drivers by Product Commercial Activity Cost Pools Receiving Forming Assembling Testing Painting Packing and shipping Cost Drivers Pounds Machine hours Number of parts Number of tests Gallons Pounds Estimated Overhead $ 70,350 150,500 412,300 51,000 52,580 820,750 $1557,480 Expected Use of Cost Drivers 335,000 35,000 217,000 25,500 5,258 335,000 Home 215,000 27,000 165,000 15,500 3,680 215,000 120,000 8,000 52,000 10,000 1,578 120,000Explanation / Answer
1
Schedule assigning each activity's overhead cost pool to each product
Activity Cost Pool
Estimated Overhead
Expected Use
Activity rate
A
B
A/B
Receiving
$ 70,350
335000
$ 0.21
Forming
$ 150,500
35000
$ 4.30
Assembling
$ 412,300
217000
$ 1.90
Testing
$ 51,000
25500
$ 2.00
Painting
$ 52,580
5258
$ 10.00
Packing and shipping
$ 820,750
335000
$ 2.45
$ 1,557,480
Calculation of overhead allocated to Products:
Home:
Activity Cost Pool
Expected Use
Activity rate
Receiving
215,000
$ 0.21
$ 45,150.00
Forming
27,000
$ 4.30
$ 116,100.00
Assembling
165,000
$ 1.90
$ 313,500.00
Testing
15,500
$ 2.00
$ 31,000.00
Painting
3,680
$ 10.00
$ 36,800.00
Packing and shipping
215,000
$ 2.45
$ 526,750.00
Total Overhead Allocated (A)
$ 1,069,300.00
Total Units (B)
54,000
Overhead Cost Per Unit = A/B
$ 19.80
Commercial:
Activity Cost Pool
Expected Use
Activity rate
Receiving
120,000
$ 0.21
$ 25,200.00
Forming
8,000
$ 4.30
$ 34,400.00
Assembling
52,000
$ 1.90
$ 98,800.00
Testing
10,000
$ 2.00
$ 20,000.00
Painting
1,578
$ 10.00
$ 15,780.00
Packing and shipping
120,000
$ 2.45
$ 294,000.00
Total Overhead Allocated (A)
$ 488,180.00
Total Units (B)
10,200
Overhead Cost Per Unit = A/B
$ 47.86
2
Calculation of the total cost per unit for each product under ABC:
Home
Commercial
Direct materials cost per unit
18.5
$ 26.50
Direct Labor cost per unit
19
$ 19.00
Overhead Cost Per Unit
$ 19.80
$ 47.86
Total Cost Per unit
$ 57.30
$ 93.36
1
Schedule assigning each activity's overhead cost pool to each product
Activity Cost Pool
Estimated Overhead
Expected Use
Activity rate
A
B
A/B
Receiving
$ 70,350
335000
$ 0.21
Forming
$ 150,500
35000
$ 4.30
Assembling
$ 412,300
217000
$ 1.90
Testing
$ 51,000
25500
$ 2.00
Painting
$ 52,580
5258
$ 10.00
Packing and shipping
$ 820,750
335000
$ 2.45
$ 1,557,480
Calculation of overhead allocated to Products:
Home:
Activity Cost Pool
Expected Use
Activity rate
Receiving
215,000
$ 0.21
$ 45,150.00
Forming
27,000
$ 4.30
$ 116,100.00
Assembling
165,000
$ 1.90
$ 313,500.00
Testing
15,500
$ 2.00
$ 31,000.00
Painting
3,680
$ 10.00
$ 36,800.00
Packing and shipping
215,000
$ 2.45
$ 526,750.00
Total Overhead Allocated (A)
$ 1,069,300.00
Total Units (B)
54,000
Overhead Cost Per Unit = A/B
$ 19.80
Commercial:
Activity Cost Pool
Expected Use
Activity rate
Receiving
120,000
$ 0.21
$ 25,200.00
Forming
8,000
$ 4.30
$ 34,400.00
Assembling
52,000
$ 1.90
$ 98,800.00
Testing
10,000
$ 2.00
$ 20,000.00
Painting
1,578
$ 10.00
$ 15,780.00
Packing and shipping
120,000
$ 2.45
$ 294,000.00
Total Overhead Allocated (A)
$ 488,180.00
Total Units (B)
10,200
Overhead Cost Per Unit = A/B
$ 47.86
2
Calculation of the total cost per unit for each product under ABC:
Home
Commercial
Direct materials cost per unit
18.5
$ 26.50
Direct Labor cost per unit
19
$ 19.00
Overhead Cost Per Unit
$ 19.80
$ 47.86
Total Cost Per unit
$ 57.30
$ 93.36