The total of overhead allocated to each department may not be equal to total of

# The total of overhead allocated to each department

• Notes
• 16

This preview shows page 2 - 6 out of 16 pages.

overhead? (The total of overhead allocated to each department may not be equal to total of overhead assigned to jobs. The minor difference is due to rounding.) (Round your intermediate calculations to two decimal places.Round your answers to the nearest whole dollar amount.Omit the "\$" sign in your response.) \$ (b)What is the total cost per unit produced for each product? (Round your intermediate calculations to two decimal places. Round your answers to 2 decimal places. Omit the "\$" sign in your
response.)M-008M-123Total unit cost\$ Requirement 2:(a)How much of the overhead will be assigned to each product if direct labor cost is used to allocate overhead? (Do not round your intermediate calculations. Omit the "\$" sign in your response.) \$ \$ (b)What is the total cost per unit produced for each product? (Do not round your intermediate calculations. Round your answers to 2 decimal places. Omit the "\$" sign in your response.) \$
3.Rodent Corporation produces two types of computer mice, wired and wireless. The wired mice are designed as low-cost, reliable input devices. The company only recently began producing the higher-quality wireless model. Since the introduction of the new product, profits have been steadily declining. Management believes that the accounting system is not accurately allocating costs to products, particularly because sales of the new product have been increasing.Management has asked you to investigate the cost allocation problem. You find that manufacturing overhead is currently assigned to products based on their direct labor costs. For your investigation, you have data from last year. Manufacturing overhead was \$1,220,000 based on production of 310,000 wiredmice and 100,000 wireless mice. Direct labor and direct materials costs were as follows:WiredWirelessTotalDirect labor\$1,039,000 \$394,000 \$1,433,000 Materials720,000 711,000 1,431,000 Management has determined that overhead costs are caused by three cost drivers. These drivers and their costs for last year are as follows:Activity LevelCost DriverCosts AssignedWiredWirelessTotalNumberof production runs\$455,000 30535Quality tests performed570,000 111930Shipping orders processed195,000 9060150Total overhead\$1,220,000 Required:(a)How much overhead will be assigned to each product if these three cost drivers are used to allocate overhead? What is the total cost per unit produced for each product?(Round "Total Cost Per Unit"
to 2 decimal places.)