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A company manufactures two models of speakers the X200 model and the X99 model. Data regarding two products follow:Model X20Direct Labor-Hours per Unit1 8Annual Production units 5000Total Direct

A company manufactures two models of speakers; the X200 model and the X99 model. Data regarding two products follow:Model X20Direct Labor-Hours per Unit=1.8Annual Production (units)=5,000Total Direct Labor Hours 9,000Model X99Direct Labor-Hours per Unit= 0.9Annual Production (units)=30,000Total Direct Labor Hours= 27,000Total Direct Labor Hours=36,000Additional Info:a. Model X200 requires $72 in direct materials per unit, and model X99 requires $50b. Direct labor wage rate is $10 per hourc. Company always used direct labor hours as base for applying manufacturing overhead cost to productsd.Model X200 is more complex to manufacture than X99 and requires use of special equipment. Consequently, company is considering use of activity-based costing to apply manufacturing overhead cost to products. 3 activity cost pools have been identified as follows:Activity Cost Pool Activity MeasureMachine Setups ………………….# of part types………………………$360,000Special Processing………………Machine Hours……………………$180,000General factory…………………….Direct Labor Hours……………….1,260,000Total: 1,800,000Activity Measure# of setups ……………………………(Model X200)=50 (Model X99)=100 (Total)=150Machine Hours ………………………(Model X200)=12,000 (Model X99)=0 (Total)=12,000Direct Labor Hours………………..(Model X200)=9,000 (Model X99)=27,000 (Total)=36,000Required:1. Assume company continues to use direct labor hours as base for applying overhead cost to products.a. Computer predetermined overhead rate.b. Compute unit product cost of each model.2.Assume company decides to use activity based costing to apply manufacturing overhead cost to products.a.Compute predetermined overhead rate for each activity cost pool and determine amount of overhead cost that would be applied to each model using activity based costing system.b.Compute unit product cost of each model.3. Explain why manufacturing overhead cost shifts from Model X99 to X200 under activity based costing

Jun 24 2020 View more View Less

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