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Larabee Company Produces Two Types of Product, Flat and Round

question 117

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Larabee Company produces two types of product, flat and round, on the same production line. For the current period, the company reports the following data.
Larabee's controller wishes to apply activity-based costing (ABC) to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above. She has collected the following information.
She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines.
Assign these three overhead cost pools to each of the two products using ABC. Show each overhead cost allocation by product and the total overhead allocated to each product. Determine average cost per unit for each of the two products using ABC. (Round your answer to 2 decimal places.) Which overhead cost allocation method would you recommend to the controller?
Larabee Company produces two types of product, flat and round, on the same production line. For the current period, the company reports the following data. Larabee's controller wishes to apply activity-based costing (ABC) to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above. She has collected the following information. She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. Assign these three overhead cost pools to each of the two products using ABC. Show each overhead cost allocation by product and the total overhead allocated to each product. Determine average cost per unit for each of the two products using ABC. (Round your answer to 2 decimal places.) Which overhead cost allocation method would you recommend to the controller? Larabee Company produces two types of product, flat and round, on the same production line. For the current period, the company reports the following data. Larabee's controller wishes to apply activity-based costing (ABC) to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above. She has collected the following information. She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. Assign these three overhead cost pools to each of the two products using ABC. Show each overhead cost allocation by product and the total overhead allocated to each product. Determine average cost per unit for each of the two products using ABC. (Round your answer to 2 decimal places.) Which overhead cost allocation method would you recommend to the controller? Larabee Company produces two types of product, flat and round, on the same production line. For the current period, the company reports the following data. Larabee's controller wishes to apply activity-based costing (ABC) to allocate the $60,000 of overhead costs incurred by the two product lines to see whether cost per unit would change markedly from that reported above. She has collected the following information. She has also collected the following information about the cost drivers for each category (cost pool) and the amount of each driver used by the two product lines. Assign these three overhead cost pools to each of the two products using ABC. Show each overhead cost allocation by product and the total overhead allocated to each product. Determine average cost per unit for each of the two products using ABC. (Round your answer to 2 decimal places.) Which overhead cost allocation method would you recommend to the controller?

Definitions:

Metabolic Activity

The set of life-sustaining chemical reactions in organisms, including digestion and the transport of substances into and between different cells.

Distal Tubule

A portion of kidney nephron between the loop of Henle and collecting duct system that plays a crucial role in the reabsorption of water, sodium, and calcium and in the secretion of potassium and hydrogen ions.

Ureter

One of two tubes that carries urine from a kidney to the bladder.

Bowman's Capsule

A cup-like sac at the beginning of the tubular component of a nephron in the kidney, which encases the glomerulus and is involved in the filtration of blood.

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