Question: Voss Visuals produces tablets and books. Total
Voss Visuals produces tablets and books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.
Other information is as follows:
Required:
a. Determine the unit product cost for tablets and books using the traditional costing system.
b. Determine the unit product cost for tablets and books using the activity-based costing system.
c. Show that General cost is the difference between the total overhead costs allocated to products under the traditional system and the total cost allocated to products under the activity-based costing system.
Transcribed Image Text:
Activity Pool Department Costs Cost Driver $ 297,000 955,500 234,000 727,500 Binding Printing Product design Number of units Machine hours Change orders None General Total overhead costs $2,214,000 Tablets 62,500 $3.00 $4.00 30,000 150,000 1,500 Books Units 20,000 $10.00 $ 8.00 19,200 144,000 2,400 Direct materials cost per unit Direct labor cost per unit Direct labor hours Machine hours Change orders
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