Rounders Company Used the Following Information When Determining the Appropriate

question 25

Essay

Rounders Company used the following information when determining the appropriate overhead rates to use in its two production departments: $\begin{array}{lrr}&\text { Fabrication }&\text {Assembly }\\\text { Budgeted overhead } & £ 350,000 & £ 500,000 \\\text { Budgeted activity: } & & \\\text { Direct labour hours (DLH) } & 14,000 & 12,500 \\\text { Machine hours (M H) } & 20,000 & 25,000 \\\text { Units projected } & 7,000 & 4,000\\\\\text { Actual operating results were as follows: }\\ \text { Actual overhead cost } & £ 355,000 & £ 505,000 \\\text { Actual activity: } & & \\\text { Direct labour hours (DLH) } & 13,500 & 13,000 \\\text { Machine hours (M H) } & 19,000 & 27,000\end{array}$
Two of the products in the product line were as follows: $\begin{array}{llc}&\text { Product } 1&\text { Product } 2\\\text { Prime costs } & £ 900,000 & £ 1,200,000 \\\text { Activity: } & & \\\text { Fabrication } & 5,000 \mathrm{DLH} & 6,000 \mathrm{DLH} \\\text { Assembly } & 9,000 \mathrm{MH} & 12,000 \mathrm{MH} \\\text { Units produced } & 7,000 & 4,000\end{array}$
a.Assume that Rounders applies overhead using a plantwide rate based on direct labour hours. Determine the unit cost of Products 1 and 2.
b.Assume that Rounders uses direct labour hours to apply overhead in the Fabrication Department and machine hours to apply overhead in the Assembly Department. Determine the unit cost of Products 1 and 2.

---

Definitions:

Toddlers

Refers to young children typically between the ages of 1 and 3 years, who are learning to walk and speak.

Sense Of Control

The perception that one has the power to influence their own life outcomes and external events, crucial for psychological health.

Developmentalists

Specialists who study the growth and development of humans throughout the lifespan, focusing on physical, cognitive, and social changes.

Social Learning

A theory which suggests that people can learn new behaviors and attitudes through observation of others' actions and the consequences they face.