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##### Kristopher Manufacturing_Activity costing

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Question;1.;Kristopher Manufacturing produces two types;of entry doors: Deluxe and;Standard. The allocation basis for;support costs has been direct labor dollars.;For 2009, Kristopher compiled the following data for the two products;Deluxe;Standard;Sales in units;50,000;400,000;Sales price per unit;\$650;\$475;Direct material and labor costs per unit;\$180;\$130;Manufacturing overhead costs per unit;\$80;\$120;Last year, Kristopher;purchased an expensive robotics system to allow for more decorative door;products in the deluxe product line. The;CFO suggested that an activity-based costing (ABC) analysis could be valuable;to help evaluate a product mix and promotion strategy for the next sales;campaign. She obtained the following ABC;information for 2009;Activity;Cost;Cost Driver;Total;Deluxe;Standard;Setups;\$500,000;# of setups;500;400;100;Machine-related;\$44,000,000;# of machine hours;600,000;300,000;300,000;Packing;\$5,000,000;# of shipments;250,000;50,000;200,000;Required (15 points);a. Using the;current system, what is the estimated;1. total cost;of manufacturing one unit for each type of door?;2. profit per;unit for each type of door?;b. Using the;activity-based costing data presented above;1. compute;the cost-driver rate for each overhead activity.;2. compute;the revised manufacturing overhead cost per unit for each type of entry door.;3. compute;the revised total cost to manufacture one unit of each type of entry door.;4. compute;the profit per unit for each type of door.;c. Is the;deluxe door as profitable as the original data estimated? Why or why not?

Paper#37192 | Written in 18-Jul-2015

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