I need to know please how to resolve this. See attachements. this is a budgeting class

1 Attachment
AC556 Week 1 Problem ABC Costing NOTE: It is expected that this problem will be completed using an Excel spreadsheet using formulas. Please see the Excel Tutorial that is available under the course home tab. The new president of the Wernecke Company was stumped. Why had profits gone down? He had directed the sales department to push the product with the highest contribution margin, and the sales department had come through with flying colors. The percent of flams sold had increased from 25% of units sold to 37.5% of units sold. So what happened? Flims Flams Sales Price per Unit $150 $500 Direct Materials per Unit $75 $200 Direct Labor Cost per Hour $25 $25 Direct Labor Hours per Unit 1 hour per unit 5 hours per unit Number of Units Produced 25,000 15,000 The variable overhead for the coming year is estimated to be $3,000,000. Required: 1. Calculate the Wernecke Company’s estimated direct labor hours to produce flims and flams. 2. Calculate the predetermined variable overhead rate that will be used in the coming year using a traditional costing system based upon direct labor hours. 3. Using a traditional costing system based upon direct labor hours, compute the unit product costs for flims and flams as well as contribution margin per unit. 4. It has been suggested to the president to consider the use of an ABC costing system to allocate manufacturing overhead. Engineering studies have revealed the following information about estimated manufacturing activities for the coming year. Activity Cost Pool Estimated Overhead Cost Expected Activity Level Setups $850,000 200 setups Scrap $350,000 500 units Testing $200,000 5,000 tests Machine related $1,600,000 100,000 Mhrs Total $3,000,000 Calculate the separate predetermined overhead rates for each of the activities listed above.
Background image of page 1
2 pages
Answer & Explanation
Verified Solved by verified expert

ongue vel laoreet ac, dictum vitae od

Fusce dui lectus, congue vel laoreet ac, dictum vitae odio. Donec aliquet. Lorem ipsum dolor sit amet, consectetur adipiscing elit. Nam lacinia pulvinar tortor nec facilisis. Pellentesque dapibus efficitur laoreet. Nam risus ante, dapibus a molestie consequat, ultrices ac magna. Fusce

Unlock full access to Course Hero

Explore over 16 million step-by-step answers from our library

Subscribe to view answer
1 Attachment