Maurice Tutor

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    Argosy University/ Phoniex University/
    Nov-2005 - Oct-2011

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    Phoniex University
    Oct-2001 - Nov-2016

Category > Accounting Posted 27 Sep 2017 My Price 10.00

Costume Kings

Costume Kings has two product lines; Machine made costumes and hand made costumes. The company assigns $80,000 in manufacturing overhead costs to two cost pools; Power cost and Inspection cost. Of this amount, the power cost pool has been assigned $32,000 and the inspection cost pool has been assigned $48,000. Additional information about each product line is shown below:

 

Machine Made

Hand Made

Sales Revenue

$240,000

$160,000

Direct labor and material cost

$120,000

$96,000

Units produced and sold

48,000

16,000

Machine hours

96,000

4,000

Quality control inspection hours

1,200

800

Required:-

  1. Allocate manufacturing overhead from the activity cost pools to each product line. Use what you believe is the most significant cost drivers from information provided.

  2. Compute the cost per unit of Machine made costumes and hand made costumes.

  3. On a per-unit basis, which product line appears to be the most profitable? Explain.

Answers

(5)
Status NEW Posted 27 Sep 2017 08:09 PM My Price 10.00

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