Question

In: Accounting

Gotham Inc. has a total of $50,000 in production overhead costs. The company’s products and related...

Gotham Inc. has a total of $50,000 in production overhead costs. The company’s products and related statistics follow.

Product X

Product Y

Direct Material in Pounds

2,400

1,600

Direct labor hours

320

480

Machine Hours

720

280

Number of setups

54

96

Number of Units Produced

312

140

Additional data: The direct material was purchased for $8,000. One direct labor hour costs $20.

2A)      Assume that Gotham uses direct labor hours to apply the overhead costs to the products. Determine the unit cost for product X?

2B)      Assume that Gotham uses the following activity centers, cost drivers, and costs to apply overhead to products.

Cost Pool

Cost Driver

Overhead Cost

Utilities

# of machine hours

$15,500

Setup

# of setups

$9,500

Material Handling

# of pounds of material

$25,000

Determine the unit cost for product Y?

please show all work and equations

Solutions

Expert Solution

ekkarill92 answered 2 years ago
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