Business
Business, 02.12.2019 18:31, mwilliams457

Churchill products is considering updating its cost system to an activity-based costing system and is interested in understanding the effects. the company’s cost accountant has identified three overhead cost pools along with appropriate cost drivers for each pool.

cost pools costs activity drivers
utilities $280,000 56,000 machine-hours
scheduling and setup 280,000 560 setups
material handling 785,000 1,570,000 pounds of material
the company manufactures three models of water basins (oval, round, and square). the plans for production for the next year and the budgeted direct costs and activity by product line are as follows:

products
oval round square
total direct costs (material and labor) $90,000 $70,000 $90,000
total machine-hours 30,000 8,000 18,000
total number of setups 60 280 220
total pounds of material 490,000 290,000 790,000
total direct labor-hours 3,500 1,500 5,000
number of units produced 3,800 2,000 5,500
required:

a. the current cost accounting system charges overhead to products based on direct labor-hours. what unit product costs will be reported for the three products if the current cost system continues to be used?

answer
Answers: 1

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