Ramsey Company produces speakers number 2 hmw.docx - Ramsey Company produces speakers(Model A and Model B Both products pass through two producing

# Ramsey Company produces speakers number 2 hmw.docx - Ramsey...

This preview shows page 1 - 3 out of 5 pages.

Ramsey Company produces speakers (Model A and Model B). Both products pass through two producing departments. Model A's production is much more labor-intensive than that of Model B. Model B is also the more popular of the two speakers. The following data has been gathered for the two products: Product Data Model A Model B Units produced per year 10,000 100,000 Prime costs \$153,000 \$1,530,000 Direct labor hours 143,000 310,000 Machine hours 21,000 196,000 Production runs 40 60 Inspection hours 900 1,300 Maintenance hours 8,000 92,000 Overhead costs: Setup costs \$300,000 Inspection costs 209,000 Machining 318,200 Maintenance 260,000 Total \$1,087,200 Required: 1. Compute the overhead cost per unit for each product by using a plantwide rate based on
Product Data direct labor hours. (Round to two decimal places.) 2. Compute the overhead cost per unit for each product by using ABC. (Round rates and unit overhead cost to two decimal places.) 3. Suppose that Ramsey decides to use departmental overhead rates. There are two departments: Department 1 (machine intensive) with a rate of \$3.90 per machine hour and Department 2 (labor intensive) with a rate of \$1.20 per direct labor hour. The

#### You've reached the end of your free preview.

Want to read all 5 pages?

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern