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1 During the past, the Larry's Lawnmowers Ltd. (LLL) allotted indirect manufacturing costs based on direct work hours. Lately, management features decided to pilot a system of time-driven activity-based costing to allocate these costs. The division makes two lawnmower models: Lo-cost and Deluxe. The following info has been obtained from the company's documents over the past yr:

Lo-cost

Elegant

Units developed

500, 000

50, 1000

Direct work hours incurred

200, 500

40, 1000

Inspections every lawnmower

a couple of

4

Time for each inspection (hrs. )

. 1

. 3

Lawnmowers jam-packed and sent per batch

2, 500

500

Specific lawnmower packing time (hrs. )

. twenty-five

. 4

Further preparation period per batch (hrs. )

30

12-15

LLL utilizes 245 personnel to perform indirect labour functions, rotating among machine setups, final home inspections and shipping and delivery. Each staff is paid out $50, 000 per year typically, including rewards. On average, every single employee functions 1, six hundred hours each year.

200 computerized production equipment are rented for $14, 000, 500 in total annually. Each equipment is available to get 1, six-hundred hours per year, including build time. Every machine is placed, no time is necessary to oversee this. Machine-related information for the entire year is as follows:

Lo-cost

Luxurious

Machine several hours per lawnmower

. 4

. 6

Set up time per work (hrs. )

300

six-hundred

Number of creation runs

90

50

Needed

a Decide the amount of indirect manufacturing costs allocated to one lawnmower of each and every type (Lo-cost, Deluxe) based upon the existing cost allocation basis (direct work hours).

m Determine the indirect developing support costs for one lawnmower of each type using time-driven activity-based costing. Use the subsequent format. Present supporting computations separately.

Lo-cost

Deluxe

1 . Indirect labour

a Machine set up

b Shipping

Total indirect labour

2 . Devices

a Equipment set up

m Machine creation

Total equipment costs...

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