Chapter 5 & 6 Practice Problems .pdf - 1. Tutorial 5 –...

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Tutorial 5 – Chapter 5 – Practice Problems1.VidPlayers, Inc. manufactures two types of DVD players, a deluxe model and a standardmodel. The deluxe model is a multi-format progressive scan DVD player with networkingcapability, Dolby digital, and DTS decoder. The standard models primary feature isprogressive-scan. Annual production is 20,000 units for the deluxe and 50,000 units forthe standard.Both products require two hours of direct labor for completion. Therefore, total annualdirect labor hours are 140,000 or 2 hours x (20,000 + 50,000). Expected annualmanufacturing overhead is $980,000. Thus, the predetermined overhead rate is $7 or($980,000 / 140,000) per direct labor hour. The direct materials cost per unit is $11 forthe deluxe model and $42 for the standard model. The direct labor cost is $18 per unitfor both the deluxe and the standard models.The company’s managers identified six activity cost pools and related cost drivers andaccumulated overhead by cost pool as follows.Activity Cost PoolCost DriverEstimated OHExpected Use of CostDriversPurchasingOrders$130,000ReceivingKilograms30,00020,000Assembling# of parts370,00074,000Testing# of tests115,00023,000FinishingUnits140,00070,000Packing and shippingKilograms195,00078,000$ 980,000Expected Use of Drivers by ProductDeluxeStandard1503504,00016,00020,00054,00010,00013,00020,00050,00017,00061,000Instructions:a.Under traditional product costing, calculate the total unit cost of both products.Prepare a simple comparative schedule of the individual costs by product.500

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Term
Winter
Professor
T.HUTCHISON
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