Vanguard Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total...
Vanguard Corporation has provided the following data from its activity-based costing system:
| Activity Cost Pool | Total Cost | Total Activity | |||
| Assembly | $ | 999,120 | 69,000 | machine-hours | |
| Processing orders | 81,175 | 1,700 | orders | ||
| Inspection | 122,311 | 1,730 | inspection-hours | ||
The company makes 490 units of product O37W a year, requiring a total of 740 machine-hours, 30 orders, and 10 inspection-hours per year. The product's direct materials cost is $36.52 per unit and its direct labor cost is $29.86 per unit.
According to the activity-based costing system, the average cost of product O37W is closest to:
Multiple Choice
-
$66.38 per unit.
-
$92.61 per unit.
-
$91.17 per unit.
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$89.69 per unit.
Homework Answers
Answer:
| Cost per unit | Total | ||
| Units produced | 490 | ||
| Machine hours required | 740 | $14.48 =(999120/69000) | 10715.2 |
| Orders required | 30 | $47.75 =(81175/1700) | 1432.5 |
| Inseption hours | 10 | $70.7 =(122311/1730) | 707 |
| Materials | $36.52 | 17894.8 | |
| Labor | $29.86 | 14631.4 | |
| 45380.9 |
Total cost of 490 units of 45380.9
cost per unit = $45380.9/490 = $92.61 per unit
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