Scribd Logo
Upload

Welcome to Scribd!

  • 22 views

    No. 4

    Uploaded by

    martinus linggo
    This document contains information from an activity-based costing system for Product Z at the Draper Company. It shows overhead rates calculated based on setup costs, design hours, and other overhead. It then applies these rates to standard and custom units to calculate total and unit costs. It also compares the traditional and ABC system costs for custom units, finding the ABC system more accurately captures $294,000 in additional setup and design overhead costs.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd

    No. 4

    Uploaded by

    martinus linggo
    22 views5 pages
    This document contains information from an activity-based costing system for Product Z at the Draper Company. It shows overhead rates calculated based on setup costs, design hours, and other overhead. It then applies these rates to standard and custom units to calculate total and unit costs. It also compares the traditional and ABC system costs for custom units, finding the ABC system more accurately captures $294,000 in additional setup and design overhead costs.

    Original Title

    no. 4

    Copyright

    © © All Rights Reserved

    Available Formats

    XLSX, PDF, TXT or read online from Scribd

    Did you find this document useful?

    Is this content inappropriate?

    This document contains information from an activity-based costing system for Product Z at the Draper Company. It shows overhead rates calculated based on setup costs, design hours, and other overhead. It then applies these rates to standard and custom units to calculate total and unit costs. It also compares the traditional and ABC system costs for custom units, finding the ABC system more accurately captures $294,000 in additional setup and design overhead costs.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    22 views5 pages

    No. 4

    Uploaded by

    martinus linggo
    This document contains information from an activity-based costing system for Product Z at the Draper Company. It shows overhead rates calculated based on setup costs, design hours, and other overhead. It then applies these rates to standard and custom units to calculate total and unit costs. It also compares the traditional and ABC system costs for custom units, finding the ABC system more accurately captures $294,000 in additional setup and design overhead costs.

    Copyright:

    © All Rights Reserved
    Download as XLSX, PDF, TXT or read online from Scribd
    Download as xlsx, pdf, or txt
    of 5

    2.

    ) Draper Company
    Product Zcosts from Activity Based Costing System

    Overhead Rates:
    $300,000 setup related cost divided by 60 setups = $5,000 per setup
    $900,000 design - related costs divided by 15,000 design hours = $60 per design hour
    $3,300,000 other overhead divided by $3,000,000 DL Cost = 110% of direct labor cost

    Standard Custom Total


    Direct Materials $882,000 $12,500 $894,500
    Direct Labor $2,910,000 $90,000 $3,000,000
    Overhead
    $5000 x 30 setups $150,000
    $5000 x 30 setups $150,000 $300,000
    $60 x 12,000 redesign hrs $720,000
    $60 x 12,000 redesign hrs $180,000 $900,000
    110% x $2,910,000 $3,201,000
    110% x $90,000 $99,000 $3,300,000
    Total Cost $7,863,000 $531,500 $8,394,500
    Unit Produced ÷ 73,500 ÷ 125
    $ 106.98 $4,252

    3.)

    Cost of Custom from traditional system, Total Per Unit


    as calculated (required 1) $237,500 $1,900

    Adjustments for:
    Understatement of setup - related
    costs, $300,000 x (50% - 3%) $141,000
    Understatement of setup - related
    costs, $900,000 x (20% - 3%) $153,000
    Total Adjustements $294,000 $2,352
    Cost of Custom from ABC system, as
    calculated (required 2) $531,500 $4,252
    $3,000,000

    $3,300,000
    $8,394,500

    You might also like