# 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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