Neldon,Inc

question 32

Essay

Neldon,Inc. ,manufactures and sells two products: Product S3 and Product K2.Data concerning the expected production of each product and the expected total direct labor-hours (DLHs)required to produce that output appear below: The direct labor rate is $18.00 per DLH.The direct materials cost per unit for each product is given below: The company is considering adopting an activity-based costing system with the following activity cost pools,activity measures,and expected activity: Required:
In all computations involving dollars in the following requirements,round off your answer to the nearest whole cent.
a.Determine the unit product cost of each product under the company's traditional costing method.
b.Determine the unit product cost of each product under the activity-based costing method.

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Definitions:

Ending Inventory

The cumulative worth of merchandise ready for sale when an accounting period concludes.

Direct Materials

Raw materials that can be directly attributed to the production of goods, forming an essential component of finished products.

Budgeted Sales

An estimate of the sales revenue a company expects to achieve for a certain period, often used for planning and control purposes.

Beginning Inventory

The value of all the inventory that a company has at the start of an accounting period, before any purchases or sales have been made.