c. Determine the unit product cost of each product under the activity-based costing
method.
3-685
3-686
193.
Stirman, Inc., manufactures and sells two products: Product Z2 and Product F0. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product Z2
800
9.0
7,200
Product F0
500
8.0
4,000
Total direct labor-
hours
11,200
The direct labor rate is $28.60 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost per Unit
Product Z2
$189.60
Product F0
$201.70
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product Z2
Product F0
Total
Labor-related
DLHs
$235,536
7,200
4,000
11,200
Production orders
Orders
27,234
400
500
900
General factory
MHs
173,180
3,600
3,400
7,000
$435,950
Required:
3-687
Determine the unit product cost of each product under the activity-based costing
method.
3-689
3-690
194.
Yarn, Inc., manufactures and sells two products: Product Z9 and Product G9. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product Z9
600
8.0
4,800
Product G9
900
6.0
5,400
Total direct labor-
hours
10,200
The direct labor rate is $19.40 per DLH. The direct materials cost per unit is $268.80 for
Product Z9 and $250.00 for Product G9
.
The company has an activity-based costing system with the following activity cost pools,
activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product Z9
Product G9
Total
Labor-related
DLHs
$264,690
4,800
5,400
10,200
Production orders
Orders
33,100
300
200
500
General factory
MHs
802,288
4,200
4,000
8,200
$1,100,078
Required:
Determine the unit product cost of each product under the activity-based costing
method.
3-693
3-694
195.
Jaure, Inc., manufactures and sells two products: Product H4 and Product I3. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product H4
100
5.0
500
Product I3
500
2.0
1,000
Total direct labor-
hours
1,500
The direct labor rate is $29.40 per DLH. The direct materials cost per unit is $244.70 for
Product H4 and $206.20 for Product I3
.
The company has an activity-based costing system with the following activity cost pools,
activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product H4
Product I3
Total
Labor-related
DLHs
$41,700
500
1,000
1,500
Production orders
Orders
67,131
500
400
900
General factory
MHs
588,098
5,000
4,800
9,800
$696,929
Required:
a. Compute the activity rates under the activity-based costing system.
b. Determine how much overhead would be assigned to each product under the activity-
based costing system.
c. Determine the unit product cost of each product under the activity-based costing
3-695
method.
Computation of activity rates:
3-696
3-697
3-698
196.
Moul, Inc., manufactures and sells two products: Product Y8 and Product Z9. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product Y8
700
7.0
4,900
Product Z9
100
4.0
400
Total direct labor-
hours
5,300
The direct labor rate is $18.80 per DLH. The direct materials cost per unit is $116.30 for
Product Y8 and $187.40 for Product Z9.
The company has an activity-based costing system with the following activity cost pools,
activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product Y8
Product Z9
Total
Labor-related
DLHs
$81,779
4,900
400
5,300
Product testing
Tests
100,572
500
700
1,200
General factory
MHs
315,117
5,000
4,900
9,900
$497,468
Required:
In all computations involving dollars in the following requirements, round off your answer
to the nearest whole cent.
a. Compute the activity rates under the activity-based costing system.
b. Determine how much overhead would be assigned to each product under the activity-
based costing system.
3-699
c. Determine the unit product cost of each product under the activity-based costing
method.
Computation of activity rates:
3-701
3-702
197.
Shadow, Inc., manufactures and sells two products: Product X9 and Product L1. Data
concerning the expected production of each product and the expected total direct labor-
hours (DLHs) required to produce that output appear below:
Expected
Production
Direct Labor-Hours Per
Unit
Total Direct Labor-
Hours
Product X9
500
5.0
2,500
Product L1
700
2.0
1,400
Total direct labor-
hours
3,900
The direct labor rate is $21.20 per DLH. The direct materials cost per unit for each
product is given below:
Direct Materials Cost
per Unit
Product X9
$171.20
Product L1
$299.80
The company is considering adopting an activity-based costing system with the following
activity cost pools, activity measures, and expected activity:
Estimated
Expected Activity
Activity Cost Pools
Activity Measures
Overhead Cost
Product X9
Product L1
Total
Labor-related
DLHs
$139,581
2,500
1,400
3,900
Machine setups
Setups
37,642
500
600
1,100
General factory
MHs
560,829
3,600
3,500
7,100
$738,052
Required: