Financial and Managerial Accounting: E11-15 The management of Gourmet Helper Appliance Company

Reminder: There are other versions of the same problem with amounts and other information that have been changed. Please make sure you compare your homework thoroughly with the tutorial details to ensure they are the same. DO NOT JUST COPY AND PASTE THE ANSWERS!!! Format of solution is the same way so please make sure you understand the tutorial contents.

Financial and Managerial Accounting
E11-15 Activity-based costing and product cost distortion
The management of Gourmet Helper Appliance Company in Exercise 11-14 has asked you to use activity-based costing to allocate factory overhead costs to the two products. You have determined that $57,000 of factory overhead from each of the production departments can be associated with setup activity ($114,000 in total). Company records indicate that blenders required 100 setups, while the toaster ovens required only 50 setups. Each product has a production volume of 5,000 units.
a. Determine the three activity rates (assembly, test and pack, and setup). b. Determine the total factory overhead and factory overhead per unit allocated to each product using the activity rates in(a). Exercise 11-14 Data: Assembly Department 108,000 Test and Pack Department 70,000 Total 178,000 The direct labor information for the production of 5,000 units of each product is as follows: Assembly Department Test and Pack Department Blender 500 DLH 1,500 DLH Toaster oven 1,500 500 Total 2,000 DLH 2,000 DLH