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Willow Company produces lawn mowers One of its plants produces two versions of mowers: a basic model and a deluxe model The deluxe model has a sturdier frame a higher horsepower engine

Willow Company produces lawn mowers. One of its plants produces two versions of mowers: a basic model and a deluxe model. The deluxe model has a sturdier frame, a higher horsepower engine, a wider blade, and mulching capability. At the beginning of the year, the following data were prepared for this plant:  Additionally, the following overhead activity costs are reported: Maintaining equipment .......$114,000 Engineering support ...........120,000 Materials handling ............? Setting up equipment ...........96,000 Purchasing materials .........60,000 Receiving goods ............40,000 Paying suppliers ............30,000 Providing space .............20,000 Total ...............$ ? Facility-level costs are allocated in proportion to machine hours (provides a measure of time the facility is used by each product). Materials handling uses three inputs: two forklifts, gasoline to operate the forklift, and three operators. The three operators are paid a salary of $40,000 each. The operators spend 25 percent of their time on the receiving activity and 75 percent on moving goods (materials handling). Gasoline costs $3 per move. Depreciation amounts to $6,000 per forklift per year. Required: Round answers to two decimal places. 1. Calculate the cost of the materials handling activity. Label the cost assignments as driver tracing or direct tracing. Identify the resource drivers. 2. Calculate the cost per unit for each product by using direct labor hours t

Jun 25 2020 View more View Less

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