Question

4. Using ABC, compute the total cost per case for each product type it the direct labor and direct materials cost is $9 per case of Extra Fine and $8 per case of Family Style. (Round your intermediate calculations to 2 decimal places. Round "Activity Rate" and "Overhead cost per unit" answers to 2 decimal places.)

Answer 1

Solution 4:

Computation of Overhead allocated per unit
				Extra Fine		Family Style
Activity cost pool	Overhead cost	Activity	Activity Rate	Estimated Activity	Overhead Allocated	Estimated Activity	Overhead Allocated
Mixing & Cooking	$18,200	2600	$7.00	1100	$7,700	1500	$10,500
Product testing	$114,200	1000	$114.20	370	$42,254	630	$71,946
Machine calibration	$335,000	800	$418.75	280	$117,250	520	$217,750
labelling and defects	$24,000	160000	$0.15	37000	$5,550	123000	$18,450
Recipe formulation	$86,000	80	$1,075.00	62	$66,650	18	$19,350
Heat, Light and water	$52,000	2600	$20.00	1100	$22,000	1500	$30,000
Material handling	$82,000	10	$8,200.00	9	$73,800	1	$8,200
Total					$335,204		$376,196
No. of units					37000		123000
Overhead per unit					$9.06		$3.06

	Extra Fine	Family Style
Direct labor and Materials	$9.00	$8.00
Overhead per unit	$9.06	$3.06
Total Cost per case	$18.06	$11.06

Solution 5:

	Extra Fine	Family Style
Selling price per unit	$17.00	$12.00
Cost per unit	$18.06	$11.06
Gross profit per unit	-$1.06	$0.94