Session 10 Solutions

Session 10 Solutions - An Example Conventional Overhead...

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An Example – Conventional Overhead Allocation $40,000 6,000 10,000 $56,000 Parts Insertion Production Set-ups Engineering Cacophony Corporation manufactures two types of audio amplifiers: Bells and Whistles and UnaKnob. Overhead costs to be allocated to these two products consist of: Additional Information: $2.50 $6.00 Direct materials cost/unit $2.67 $2.67 Direct labor cost/unit 10 1 9 Number of engineering orders 200,000 100,000 100,000 Total number of parts 12 2 10 Number of production runs/set ups 5 100 Parts per unit 21,000 20,000 1,000 Units produced Total UnaKnob Bells&Whistles
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costs to each type of amplifier (cost object) based on direct labor costs. The first thing we need to do is determine the overhead allocation rate: ($2.67 x 1,000) + ($2.67 x 20,000) $1.00/$DL = $56,000 = Overhead allocation rate Now, we can calculate the unit costs:
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This note was uploaded on 10/06/2010 for the course FNCE 100 taught by Professor Jaffe during the Spring '10 term at UNC Asheville.

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Session 10 Solutions - An Example Conventional Overhead...

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