BBUS 2541 Study Guide - A.D. Vision, Material Handling, Billable Hours
Document Summary
5-44 (30 minutes: predetermined overhead rate = budgeted overhead budgeted direct-labour hours. = ,000 20,000* = . 50 per direct labour hour. *20,000 budgeted direct-labour hours = (2,500 units of medform)(3 hrs. /unit) + (3,125 units of procel)(4 hrs. /unit) Order processing, machine processing, and product inspection costs of a medform unit and a procel unit: The manufactured cost of a medform unit is . 60, and the manufactured cost of a. The procel product is overcosted by . 48 (. 00 - . 52) under the traditional product-costing system. The labour-hour application base resulted in a unit cost; in contrast, the more accurate abc approach yielded a lower unit cost of . 52. Medform product, which is undercosted by . 10 under the traditional approach (. 50 vs. . 60 under abc). The traditional costing system overcosts the procel product line by a total of. ,750 (. 48 x 3,125 units), and it undercosts the medform product line by the same amount, ,750 (. 10 x 2,500 units). b.
