60.1K

Verified Solution

Link Copied!

4. Zoroaste r Industries makes three types of products- Model G, Model P, and Model V. ufacturing operations are mechanized and there is no direct labor. facturing overhead costs are significant, and zoroaster has adopted an activity- Direct materials costs per unit for each model are as follows: based costing system. Model G $74 Model P $86 Model V $63 Zo roaster Industries has 5 activities-assembly, materials management, testing, inspecting and milling. The cost driver for assembly is machine hours. Total costs and production volumes for the year 2017 were estimated as follows Total Indirect Cost Allocation Base Cost Driver Assembly Materials Management Testing Inspection Milling $950,500 $459,000 $275,000 $165,500 $452,000 316,800 3 Crates Parts 10,700 2 57 Units 5,000 33. Inspections 213,2002Machine Hours The following is the amount each product uses of each driver: Model G 2,650 66,250 Crates 13,250 parts 1,060 units 530 inspections Model P 1,845 42,435 Crates 12,915 parts 1,230 units 410 inspections Model V 3,500 112,000 Crates 14,000 parts 1,400 units 700 inspections No. Of Units Materials Management Inspection ing 39,750 Machine Hours 20,295 Machine hours 59,500 Machine Hours Calculate the estimated cost of overhead per unit using the ABC method. Complete the 4 step process to allocate indirect costs to each unit. Calculate the estimate total cost per unit. (40 points) Calculate the estimated total cost per unit using the single base allocation method for the same data set using machine hours as the driver. (10 points) Which method is superior? Why? (4 points) a. b. c

Answer & Explanation Solved by verified expert

See Answer