(Appendix 4A)Hoffhines Manufacturing Corporation Has a Traditional Costing System in Which

question 11

Essay

(Appendix 4A)Hoffhines Manufacturing Corporation has a traditional costing system in which it applies manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs).The company has two products, E00X and E71U, about which it has provided the following data: The company's estimated total manufacturing overhead for the year is $1, 021, 200 and the company's estimated total direct labor-hours for the year is 20, 000.
The company is considering using a variation of activity-based costing to determine its unit product costs for external reports.Data for this proposed activity-based costing system appear below: Required:
a.Determine the manufacturing overhead cost per unit of each of the company's two products under the traditional costing system.
b.Determine the manufacturing overhead cost per unit of each of the company's two products under activity-based costing system.

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Definitions:

Conservatism

A political and social philosophy that promotes retaining traditional social institutions and values, emphasizing stability, law, and order.

U.S. Economy

The economic system of the United States, characterized by a mixed economy with capitalist and regulatory elements.

Prosperity

A state of flourishing, success, or good fortune, often related to economic well-being.

Mechanization

The process of changing from working largely or exclusively by hand or with animals to doing that work with machinery.