ch 8 hw - Steve Avery February 2 2006 Acc 250b Chapter 8...

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Steve Avery February 2, 2006 Acc. 250b Chapter 8 Homework Problem 8-22: 1. POHR = 900,000/5,000 = $18/DLH Unit Product Costs: Deluxe Regular Direct Materials $40 $25 Direct Labor 14 7 Manuf. Overhead 2(18) = 36 18 Total $90 $50 2. Activity Cost Pools Total Cost Total Activity Activity Rate Purchasing $204,000 600 $340 /purchase order Processing 182,000 35,000 5.2 /machine hour Scrap/rework 379,000 2,000 189.5 /order Shipping 135,000 900 150 /shipment 3. Deluxe Activity Expected Activity Activity Rate Total Deluxe MOH Purchasing $200 340 $68,000 Processing 20,000 5.2 104,000 Scrap/rework 1,000 189.5 189,500 Shipping 250 150 37,500 Totals 399,000 Regular Activity Expected Activity Activity Rate Total Regular MOH Purchasing $400 340 $136,000 Processing 15,000 5.2 78,000 Scrap/rework 1,000 189.5 189,500 Shipping 650 150 97,500 Totals 501,000 a) Deluxe overhead cost per unit: 399,000/5,000 = 79.8/unit Regular overhead cost per unit: 501,000/40,000 = 12.525/unit b) Unit product cost = DM + DL +MOH Deluxe = $40 + 14 + 79.8 = $133.80 Regular = $25 + 7 + 12.53 = $44.53
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4. Shipping is an overly large expense, but the biggest problem is scrap/rework because
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