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    lulalu's Avatar
    lulalu Posts: 1, Reputation: 1
    New Member
     
    #1

    Sep 23, 2017, 10:04 AM
    Compute the selling price of one unit of Model #36 using the activity-based costing.
    Red Corporation manufactures a variety of products. In the past, Red has been using a traditional costing system in which the predetermined overhead rate was 150% of direct labor cost. Selling prices had been set by multiplying total product cost by 200%. Sensing that this system was distorting costs and selling prices, Red has decided to switch to an activity-based costing system for manufacturing overhead costs using three activity cost pools. Selling prices are still to be set at 200% of unit product cost under the new system. Information on these cost pools for next year are as follows:



    Activity Cost Pool Activity Measure Estimated Activity Estimated Overhead Cost
    Machine Setups................. Number of setups 400 $150,000
    Quality Control.................... Number of inspections 1,500 $180,000
    Other Overhead.................. Machine hours 30,000 $480,000

    Information (on a per unit basis) related to Model #36 are as follows:
    Model #36
    Direct material cost................................ $540
    Direct labor cost...................................... $600
    Number of setups................................... 3
    Number of inspections.......................... 3
    Number of machine hours................... 8
    Curlyben's Avatar
    Curlyben Posts: 18,514, Reputation: 1860
    BossMan
     
    #2

    Sep 23, 2017, 01:05 PM
    What do YOU think ?
    While we're happy to HELP we wont do all the work for you.
    Show us what you have done and where you are having problems..
    ma0641's Avatar
    ma0641 Posts: 15,675, Reputation: 1012
    Uber Member
     
    #3

    Sep 23, 2017, 04:56 PM
    With all the copy work you could have started!!

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