Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. accounting
  3. perez company produces commercial gardening equipm

Perez Company produces commercial gardening equipment. Since production is highly automated, the company allocates its...

70.2K

Verified Solution

Question

Accounting

Perez Company produces commercial gardening equipment. Since production is highly automated, the company allocates its overhead costs to product lines using activity-based costing. The costs and cost drivers associated with the four overhead activity cost pools follow:

Activities
Unit Level Batch Level Product Level Facility Level
Cost $ 37,800 $ 15,640 $ 13,000 $ 304,000
Cost driver 1,400 labor hours 34 setups Percentage of use 16,000 units

Production of 850 sets of cutting shears, one of the companys 20 products, took 270 labor hours and 6 setups and consumed 17 percent of the product-sustaining activities.

Required

  1. Had the company used labor hours as a companywide allocation base, how much overhead would it have allocated to the cutting shears?
  2. How much overhead is allocated to the cutting shears using activity-based costing?
  3. Compute the overhead cost per unit for cutting shears first using activity-based costing and then using direct labor hours for allocation if 850 units are produced. If direct product costs are $200 and the product is priced at 35 percent above cost for what price would the product sell under each allocation system?
Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Basic Math
1.2K views

the variable is “number of motor vehicle fatalities” A. Continuous, ratio level B. Discrete, nominal level C. Discrete, ratio...

Statistics
1.2K views

1. Create the following items in R. Show the R output provided by each object. b The...

Physics
1.2K views

The spectral term for the atom with 70 filled subshell and only S 3 2...

Algebra
1.2K views

Day 9 SB SOL AII.10,12 Exit Ticket1. A committee of 5 teachers and 2 students...

Accounting
1.2K views

Shine Jewelry sells 400 units resulting in $7,000 of sales revenue, $3,000 of variable costs,...

Accounting
1.2K views

2. Chris and Debbie borrow $10,000 at 15% compounded monthly. The loan is to be...

Accounting
1.2K views

Explain the primary sources of tax law. Formatyour paper consistent...

Accounting
1.2K views

Documenti - Word WTM Review Search OB 20. me Insert Design Layout References Mailings Calibri...

Accounting
1.2K views

A financial forecast A. Presents expected financial position, results of operations,...

Accounting
1.2K views

Kathy Myers frequently purchases shares and bonds, but she is uncertain how to determine the...

Accounting
1.2K views

2. Using the following information, create a network diagram. Calculate the total duration (days) of...

Accounting
1.2K views

Josef has two daughters, Paige, age 4, and Natalie, age 10. Josef paid a local...