Question

Adams, Inc., is a book publisher that reissues old titles. The company offers these books with either a standard machine-glued hard cover or a deluxe, hand-embossed, hand-stitched, leather cover. Adams currently allocates overhead to the books based on direct labor hours.

A recent activity analysis conducted by the controller revealed the following information.

Standard
Edition Deluxe
Edition
Units produced 455,000 14,000
Direct labor hours 500,500 37,800
Printing press hours 104,650 3,220
Sales orders 4,550 15,400


(a) Calculate the following for each product: (Round answers to 2 decimal places, e.g. 15.25.)

Standard edition Deluxe edition
i. Direct labor hours per unit
DLH / unit
DLH / unit
ii. Printing press hours per unit
PPH / unit
PPH / unit
iii. Sales orders per unit
order / unit
order / unit

Answer 1

Instructions are below

Step-by-step explanation:

Giving the following information:

Standard Edition - Deluxe Edition

Units produced: 455,000 - 14,000

Direct labor hours: 500,500 - 37,800

Printing press hours: 104,650 - 3,220

Sales orders: 4,550 - 15,400

The direct labor hours per unit is calculated as follow:

Direct labor hours per unit= total direct labor hours/ total units

Standard:

Direct labor hours per unit= 500,500/455,000 units= 1.1 hour per unit

Deluxe:

Direct labor hours per unit= 37,800/14,000= 2.7 hours per unit

Printing press hours per unit= total printing hours/total units

Standard= 104,650/455,000= 0.23 hours per unit

Deluxe= 3,220/14,000= 0.23 hours per unit

Sales order per unit= total orders/total units

Standard= 4,550/455,000= 0.01 order per unit

Deluxe= 15,400/14,000= 1.1 order per unit