Reference no: EM132588977
Rockford Company produces two different products, Product A and Product B. Rockford uses a traditional volume-based costing system in which direct labor hours are the allocation base. Rockford is considering switching to an ABC system by splitting its manufacturing overhead cost across three activity pools: Setup, Production, and Finishing.
The cost of each activity and usage of the activity drivers are as follows:
COST Usage by Product A Usage by Product B
Setup (Batches) $68,000 330 batches 170 batches
Production (Direct Labor Hours) $336,000 89,500 DL hours 51,000 DL hours
Finishing (Machine Hours) $86,000 56 Machine hours 44 Machine hours
Rockford manufactures 10,000 units of Product A and 21,000 units of Product B per month.
Required:
Question a. Calculate the predetermined overhead rate under the traditional costing system. (Round your answer to 2 decimal places.)
Question b. Calculate the activity rate for Setup. (Round your answer to 2 decimal places.)
Question c. Calculate the activity rate for Production. (Round your answer to 2 decimal places.)
Question d. Calculate the activity rate for Finishing.
Question e. Calculate the indirect manufacturing costs assigned to each unit of Product A under the traditional costing system.(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question f. Calculate the indirect manufacturing costs assigned to each unit of Product B under the traditional costing system.(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question g. Calculate the indirect manufacturing costs assigned to each unit of Product A under the ABC system.(Do not round intermediate calculations. Round your answer to 2 decimal places.)
Question h. Calculate the indirect manufacturing costs assigned to each unit of Product B under the ABC system. (Do not round intermediate calculations. Round your answer to 2 decimal places.)
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