This paper circulates around the core theme of Cosgrove Company manufactures two products together with its essential aspects. It has been reviewed and purchased by the majority of students thus, this paper is rated 4.8 out of 5 points by the students. In addition to this, the price of this paper commences from £ 99. To get this paper written from the scratch, order this assignment now. 100% confidential, 100% plagiarism-free.
Cosgrove Company manufactures two products, Product K-7 and Product L-15. Product L-15 is of fairly recent origin, having been developed as an attempt to enter a market closely related to that of Product K-7. Product L-15 is the more complex of the two products, requiring 3 hours of direct labor time per unit to manufacture compared to 2 hour of direct labor time for Product K-7. Product L-15 is produced on an automated production line.Overhead currently is applied to the products on the basis of direct labor-hours. The company estimated it would incur $925,944 in manufacturing overhead costs and produce 11,400 units of Product L-15 and 45,600 units of Product K- 7 during the current year.Unit costs for materials and labor are:Product K-7Product L-15 Direct material$15 $25 Direct labor$13 $13 Required:a-1Compute the predetermined overhead rate under the current method of allocation and. (Do not round intermediate calculations. Round your answer to 2 decimal places. Omit the “$” sign in your response.). Predetermined overhead rate$ a-2Determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the “$” sign in your response.) Unit Product Cost Product K-7$ Product L-15$ b.The company is considering the use of activity-based costing as an alternative to its traditional costing method for manufacturing overhead. Data relating to the company’s activity cost pools for the current year are given below: Total Activity Activity Cost PoolsTotal CostProduct K-7Product L-15Total Machine setups required$392,080 1,170 2,210 3,380 Purchase orders issued55,706 552 140 692 Machine-hours required171,810 7,930 11,160 19,090 Maintenance requests issued306,348 653 910 1,563 $925,944 Using the data above and an activity-based costing approach, determine the unit product cost of each product for the current year. (Do not round intermediate calculations. Round your answers to 2 decimal places. Omit the “$” sign in your response.)Product K-7Product L-15 Direct materials $ $ Direct labour Manufacturing overhead Total unit product cost $ $