Question

Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates:

Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory Activity Rates $ 8.00 per direct labor-hour $ 9.00 per machine-hour $ 80.00 per setup $ 200.00 per order $ 190.00 per shipment $ 9.00 per direct labor-hour Cost and activity data have been supplied for the following products: Direct materials cost per unit Direct labor cost per unit Number of units produced per year $ $ J78 7.50 4.50 1,000 B52 $44.00 $ 4.00 400 Total Expected Activity J78 B52 1,100 2,300 30 Direct labor-hours Machine-hours Machine setups Production orders Shipments 4 12 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Answer 1

Calculation of Unit cost
	J78	B52
Direct material per unit	7.5	44
Direct labor per unit	4.5	4
Overheads
Labor related	8800	240
Machine related	20700	270
Machine Setups	400	160
Production Orders	800	400
Shipments	2280	380
General Factory	9900	270
Total overheads	42880	1720
Number of units	1000	400
Overhead per unit	42.88	4.3
Unit Product Cost	54.88	52.3

Α B C 1 Calculation of Unit cost J78 B52 3 Direct material per unit 7.5 44 4 Direct labor per unit 4.5 5 Overheads 6 Labor related =8*1100 =8*30 7 Machine related =9*2300 =9*30 8 Machine Setups =80*5 =80*2 9 Production Orders =200*4 =200*2 10 Shipments =190*12 =190*2 11 General Factory =9*1100 =9*30 12 Total overheads =SUM(B6:B11) =SUM(C6:C11) 13 Number of units 1000 400 14 Overhead per unit =B12/B13 =C12/C13 15 Unit Product Cost =B3+B4+B14 =C3+C4+C14