Winterland, Inc

question 15

Essay

Winterland, Inc., produces two types of skis, downhill skis and cross country skis. Product and production information about the two items is shown below:

Required:

1. If Winterland uses the traditional two-stage method of allocating overhead costs based on direct labor hours, what is the amount of indirect costs per set of skis for each of the two types of skis?
2. If Winterland uses activity based costing, what is the total amount of indirect costs per set of skis for each of the two types of skis? Assume that depreciation is allocated based on machine hours, setup costs based on the number of setups, and miscellaneous costs based on the number of direct labor hours.

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Definitions:

Gastrocnemius Muscles

A major calf muscle that is involved in walking, running, and jumping by flexing the foot at the ankle.

Soleus Muscles

A powerful muscle in the back part of the lower leg (calf) that is involved in standing and walking.

Plantar Flexion

The movement that decreases the angle between the sole of the foot and the back of the leg, as seen when pointing the toes.

Aerobic Respiration

A metabolic process in cells that uses oxygen to convert glucose or other nutrients into energy (ATP), producing carbon dioxide and water as waste products.