Stockin Company produces Tablets and Books
by | Mar 18, 2020 | Uncategorized
Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.
Activity Pool |
Department Costs |
Cost driver |
Binding |
$229,687.50 |
Number of units |
Printing |
787,167.50 |
Machine hours |
Product design |
207,468.00 |
Change orders |
General |
728,677.00 |
None |
Total overhead costs |
$1,953,000.00 |
Other information is as follows:
Tablets |
Books |
Units |
73,500 |
18,375 |
Direct materials cost per unit |
$4.00 |
$12.00 |
Direct labor cost per unit |
$5.00 |
$10.00 |
Direct labor hours |
31,000 |
15,500 |
Machine hours |
145,100 |
108,825 |
Change orders |
1,921 |
3,842 |
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(a)
Determine the unit product cost for Tablets using the traditional costing system. (Round answer to 2 decimal places, e.g. 1.64.)
Unit product cost for Tables |
$ 26.71 |
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(b) Determine the unit product cost for Tablets using the activity-based costing system. (Round answer to 2 decimal places, e.g. 1.64.)
Unit product cost for Tablets |
$
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