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Company makes two models of children's playhouses, the Castle and the Mansion.
Basic production information follows:

Castle Mansion
Direct materials cost per unit $ 35
$ 63
Direct labor cost per unit
21

36
Sales price per unit
357

572
Expected production per month
760 units
420 units
Landon has monthly overhead of $194,915, which is divided into the following cost pools:



Setup costs $ 83,300
Quality control
67,415
Maintenance
44,200

Total $ 194,915

The company has also compiled the following information about the chosen cost drivers:

Castle Mansion Total
Number of setups 35 63 98
Number of inspections 320 375 695
Number of machine hours 1,100 1,500 2,600
Requirement 1:

Suppose Landon used a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. (Do not round intermediate calculations and round your final answers to the nearest whole dollar amount. Omit the "$" sign in your response.)


Overhead assigned
Castle Model: $
Mansion Model: $

Total Overhead Cost $

Requirement 2:

Calculate the production cost per unit for each of Landon's products under a traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

Castle Mansion
Unit cost $ $
Requirement 3:

Calculate Landon's gross margin per unit for each product under the traditional costing system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

 


 Castle Mansion
Gross margin $ $
Requirement 4:

Select the appropriate cost driver for each cost pool and calculate the activity rates if Landon wanted to implement an ABC system. (Round your answers to 2 decimal places. Omit the "$" sign in your response.)




Setup Costs
$
Quality Control
$
Maintenance
$
Requirement 5:

Assuming an ABC system, assign overhead costs to each product based on activity demands . (Omit the "$" sign in your response.)

Overhead
Assigned
To Castle		 Overhead Assigned
To Mansion
Setup Cost $ $
Quality Control $ $
Maintenance $ $

Total Overhead Cost $ $

Requirement 6:

Calculate the production cost per unit for each of Landon's products in an ABC system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

 


 Castle Mansion
Unit cost $ $
Requirement 7:

Calculate Landon's gross margin per unit for each product under an ABC system. (Round your intermediate calculations and final answers to 2 decimal places. Omit the "$" sign in your response.)

Castle Mansion
Gross margin $ $

Accounting Basics, Accounting

  • Category:- Accounting Basics
  • Reference No.:- M9796643

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