80.2K

Verified Solution

Link Copied!

Activity-Based Costing and Product Cost Distortion Digital Storage Concept Inc. is considering a change to activity-based product costing. The company produces two products, cell phones and tablet PCs, in a single production department. The production department is estimated to require 4,000 direct labor hours. The total Indirect Iabor is budgeted to be $528,000. Time records from indirect labor employees revealed that they spent 40% of their time setting up production runs and 60% of their time supporting actual production The following information about cell phones and tablet PCs was determined from the corporate records Number Direct of Units Setups Cell phones 500 2.000 60,000 Tablet PCs 1,100 2,000 60,000 Labor Hours Total 1,600 4,000 120,000 If required, round your answers to the nearest cont. a. Determine the Indirect labor cont per unit allocated to coit phones and tablet PCs under a single plantwide factory overhead rate system using the direct labor hours as the allocation base, Cell phones per unit Tablet PC per unit b. Determine the budgeted activity costs and activity rates for the indirect lobor under activity-based costing. Assume two activities--one for setup and the other for production support. If required, round your answers to the nearest cent a. Determine the Indirect labor cost per unit allocated to cell phones and tablet PCs under a single plantwide factory overhead rate system using the direct lobor hours as the allocation base. Cell phones per unit Tablet PCs per unit b. Determine the budgeted activity costs and activity rates for the Indirect labor under activity-based costing. Assume two activities-one for setup and the other for production support Budgeted Activity Cost Activity Rate Setup per setup Production support per direct labor hour c. Determine the activity cost per unit for indirect labor allocated to each product under activity-based costing, Cell phones per unit Tablet PC per unit

Answer & Explanation Solved by verified expert

See Answer