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Practice Problem 2 The Schramka Company manufactures a variety of chairs. The company's activity areas and related data follow: Manufacturing Activity Budgeted Overhead Costs Expected Capacity Overhead Cost per Unit of Cost Driver (PDOH) Cost Driver Material handling Cutting Assembly Painting $ 200,000 $ 2,000,000 $ 5,000,000 $ 1,000,000 Number of parts Number of parts Direct labor hours Number of units 800,000 800,000 200,000 45,455 $0.25 $2.50 $25.00 $22.00 Two styles of chairs were produced in March, the standard chair and an unpainted chair that had fewer parts and required no painting activities. Their quantities, direct material costs, and other data follow: Units Produce Direct Material Costs Number of Parts Assembly Direct Labor Hours Standard chair Unpainted chair 5,000 1,000 $600,000 $85,000 100,000 15,000 7,500 1,100 Required: 1. Compute the total manufacturing costs and unit costs of the standard chairs and the unpainted chairs using ABC 2. Suppose upstream activities, such as product design, were analyzed and applied to the standard chairs at $20 each and the unpainted chairs at $15 each. Moreover, similar analyses were conducted of downstream activities, such as distribution, marketing, and customer service. The downstream costs applied were $200 per standard chair and $80 per unpainted chair. Compute the full product cost per unit

Answer 1

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Total manufacturing Lost Standard Unpainted 6DD, ODD 85000 Direct material cost malzuial handling Cutting Assembly Painting 25000 250,000 187500 110,000 3750 37500 27500 22000 TOTAL MANUFACTURING 112500 175750 COST Number of units. 5000 TOOD Unit cost. 234.5 175.75 Standard unpainted. 234.5 175-75 unit cost Upstream activity Downstream activity 15 20 200 80 FULL 454.5 270-75 produut Lost per unit.