Customized to some degree for specific customers

Reference no: EM13939833

I already know part 1- see answer. Please assist with part 2. Thank you!

Kunkel Company makes two products and uses a conventional costing system in which a single plantwide predetermined overhead rate is computed based on direct labor-hours. Data for the two products for the upcoming year follow:

Mercon Wurcon
Direct materials cost per unit $ 12.30 $ 22.20
Direct labor cost per unit $ 5.50 $ 2.50
Direct labor-hours per unit 0.46 0.28
Number of units produced 18,000 80,000

These products are customized to some degree for specific customers.

Required:
1. The company's manufacturing overhead costs for the year are expected to be $748,592. Using the company's conventional costing system, compute the unit product costs for the two products. (Do not round intermediate calculation. Round your final answers to 2 decimal places.)

Mercon Wurcon
Unit product cost $ $
ANSWER: MERCON: $29.02 WURCON: $31.53

2. Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected to be distributed as follows during the upcoming year:

Mercon Wurcon Total
Engineering design time (in hours) 3,000 3,200 6,200

Compute the unit product costs for the two products using the proposed ABC system. (Round your final answers to 2 decimal places.)

Mercon Wurcon
Unit product cost $ $

Reference no: EM13939833

Questions Cloud

Recommend options that would be consistent with organization : Recommend options that would be consistent with the organization's accounting practices, accounting processes, and accounting-relateddepartments.

What is the required percentage rate of return of equity : Companies U and L are identical in every respect except that U is unlevered while L has $10 million of 4.6% bonds outstanding. Assume that (1) all of the MM assumptions are met, (2) there are no corporate or personal taxes, (3) EBIT is $1.7 million, ..

What are the characteristics of american democracy : What are the characteristics of American democracy? How does American democracy differ from the theory of democratic government

Is length is an attribute of the string class : In the following code how many String objects are instantiated?

Customized to some degree for specific customers : Management is considering an activity-based costing system in which half of the overhead would continue to be allocated on the basis of direct labor-hours and half would be allocated on the basis of engineering design time. This time is expected t..

Comparison of healthcare systems of singapore and japan : Comparison of healthcare systems of singapore and japan. Including: 1. structure of the healthcare system 2. national healthcare programs and policies 3. healthcare financing in the country 4. mix of public and private healthcare services

When should an attribute of a class be static : Is there ever a reason to have a public attribute in a class?

Ancestral home in development of modern astronomy : • Write an essay no longer than two pages, not more than 1000 words (6000 characters) Subject 1: Women in Astronomy • The ups and downs of women in astronomy

Alcohol and drug abuse records : Some alcohol and drug abuse records were inadvertently left accessible via internet. Fifty patients were affected.

User Account

All Pages