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Oscar, Inc. manufactures bookcases and uses an activity-based costing system Oscar activity 1 Standard $62 per unit areas

Oscar, Inc. manufactures bookcases and uses an activity-based costing system. Oscar's activity 1. Standard $62 per unit areas and related data follow: Budgeted Cost of Activity Predetermined Overhead Activity Allocation Base Allocation Rate Materials handling S 240,000 Number of parts $ 1.00 Assembly 3,500,000 Number of assembling direct labor hours 17.00 Number of finished units Finishing 190,000 4.50 Refers to number of units receiving the finishing activity

, not the number of units transferred to Finished Goods Inventory Oscar produced two styles of bookcases in October: the standard bookcase and an unfinished bookcase, which has fewer parts and requires no finishing. The totals for quantities, direct materials costs, and other data follow: Total Units Total Direct Materials Costs Total Direct Total Number Total Assembling Direct Product of Parts Produced Labor Costs Labor Hours 7,000 $ 91,000 $105,000 Standard bookcase 28,000 10,500 Unfinished bookcase 7,500 82,500 75,000 22,500 7,500 Requirements 1. Compute the manufacturing product cost per unit of each type of bookcase.

2. Suppose that pre-manufacturing activities, such as product design, to the standard bookcases at $5 each and to the unfinished bookcases at $3 each. assigned were Similar analyses were conducted of post-manufacturing activities such as distribu- tion, marketing, and customer service. The post-manufacturing costs standard bookcase and $18 per unfinished bookcase. Compute the full product were $20 per Costs per unit. 3. Which product are used for management decision making? Explain the difference. reported in the external financial statements? Which costs costs are 4. What price should Oscar's managers set for unfinished bookcases to earn a net profit of $19 per bookcase?

Feb 11 2020 View more View Less

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