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Illustration 21a 3 expected number of cost drivers

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Unformatted text preview: letion. Therefore, Total annual direct labor hours are 30,000 (25,000 x 5,000). Expected annual manufacturing overhead costs are $900,000. Predetermined overhead rate is $30 ($900,000 / 30,000) per direct labor hour. Direct materials cost per unit is $40 for The Boot and $30 for The Club. Direct labor cost is $12 per unit for each product. Chapter 21-49 Traditional Costing versus Activity-Based Costing Traditional Costing versus Activity-Based Costing Unit Costs Under Traditional Costing Illustration 21A-1 Units costs—traditional costing Chapter 21-50 Traditional Costing versus Activity-Based Costing Traditional Costing versus Activity-Based Costing Unit Costs Under ABC DETERMINING OVERHEAD RATES UNDER ABC Atlas Company’s expected annual overhead costs of $900,000 relate to three. Illustration 21A-2 Computing overhead rates-ABC Chapter 21-51 Traditional Costing versus Activity-Based Costing Traditional Costing versus Activity-Based Costing Unit Costs Under ABC ASSIGNING OVERHEAD COSTS TO PRODUCTS UNDER ABC In assigning costs, it is necessary to know the expected number of cost drivers for each product. Illustration 21A-3 Expected number of cost drivers Chapter 21-52 Traditional Traditional Traditional Traditional Costing versus Costing versus Activity-Based Activity-Based Costing Costing Costing Costing Illustration 21A-2 Illustration 21A-3 Illustration 21A-4 Assignment of overhead cost to products $100,000 300,000 25,000 $425,000 25,000 5,000 $17 Ch...
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