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5e sol04-19

# 5e sol04-19 - Part#127 Part#234 Overhead costs Setup...

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Cost Management Hansen and Mowen Prob 4-19 Name: SOLUTION Enter the appropriate amounts in the shaded cells in columns E, G, I, and K. 1) Overhead rate = Estimated overhead \$6,990,000 = \$25.65 per DLH Estimated labor hrs. 272,500 Overhead costs dlh per unit x Rate Part #127 0.50 25.65 = \$12.83 Part #234 Wrong 0.225 25.65 = \$5.77 Gross margin Part #127 Part #234 Selling price \$31.86 \$24.00 Less: unit cost Prime Cost + Overhead Part #127 8.53 12.83 21.36 Part #234 6.26 5.77 12.03 Unit gross margin \$10.50 \$11.97 2) Activity Activity Activity Activity Activity Cost Driver Capacity Rate Setup \$240,000 # of production runs 300 \$800.00 per run Machine 1,750,000 # of machine hrs. 185,000 \$9.459459 per mach. hr. Receiving 2,100,000 # of orders 1,400 \$1,500.00 per order Engineering 2,000,000 # of engineering hrs. 10,000 \$200.00 per eng. hr. Materials handling 900,000 # of material moves 900 \$1,000.00 per move ABC costing
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Unformatted text preview: Part #127 Part #234 Overhead costs Setup Part #127 100 runs x \$800.00 \$80,000 Part #234 200 runs x \$800.00 \$160,000 Machine Part #127 125,000 mh x \$9.459459 Wrong 1,182,432 Part #234 60,000 mh x \$9.459459 Wrong 567,568 Receiving Part #127 400 orders x \$1,500.00 600,000 Part #234 1,000 orders x \$1,500.00 1,500,000 Engineering Part #127 5,000 eng. hr x \$200.00 1,000,000 Part #234 5,000 eng. hr x \$200.00 1,000,000 Materials handling Part #127 500 min. x \$1,000.00 500,000 Part #234 400 min. x \$1,000.00 400,000 Total cost \$3,362,432 \$3,627,568 Divided by units produced 500,000 100,000 Overhead cost per unit \$6.72 \$36.28 Prime cost per unit 8.53 6.26 Unit cost \$15.25 \$42.54 Gross profit Part #127 Part #234 Selling price \$31.86 \$24.00 Less:Unit cost 15.25 42.54 Gross margin \$16.61 \$(18.54)...
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