Poo Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders 1 answer below »
Poo Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders. Model Annual Sales in Units High F 10,000 Great P 16,000
National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows: High F Great P Direct materials $38.00 $25.40 Direct labor $17.52 $13.14 Budget factory overhead Engineering and Design 2,409 engineering hours $404,712 Quality Control 12,848 inspection hours $269,808 Machinery 33,726 machine hours $539,616 Miscellaneous Overhead 26,400 direct labor hours $134,904 Total $1,349,040
National’s controller had been researching activity-based costing and decided to switch to it. A special study determined National’s two products have the following budgeted activities: High F Great P Engineering and design hours 969 1,440 Quality control inspection hours 5,648 7,200 Machine hours 20,286 13,440 Labor hours 12,000 14,400
Using activity-based costing, applied engineering and design factory overhead for the High F model per unit is (rounded to the nearest cent):