Question

National manufactures two products, A#4 and B#3. The company expects to produce and sell 3,200 units of A#4 and 2,100 units of B#3 during the year. National uses activity based costing to compute overhead costs per product. Data relating to the company's three activity cost pools are given below for the current year: Direct Materials Direct Labor A4 $36.50 $28.30 B#3 $46.50 $57.90 Activity Cost Pool Machine Setups Purchase orders General Factory Estimated Expected Activity Overhead Costs A#4 B#3 $4,680 260 260 $85,000 1080 2,320 $134,8807 ,040 4 ,200 Total 520 3,400 11,240 Required: Using the activity-based costing approach, determine the overhead rates for each activity cost pool. 6 points) Using the above overhead rates determine the overhead cost charged per unit for each product (20 points) Determine the total cost per unit for each product (6 points)

Answer 1

January 2019 08 WK 02 (008-357) • Tuesday • Solo - (4) Overhead Particulars rates TO for activities Machine Purchase Setups orders 4480 85000 520 3400 a 25 General factory 134,880 Estimated Overhead Cost Total Expected Activity loverhead rate for Activit, 11240 12 per unit 01 e (6) Overhead cost charged o Partiwlars Machine Setup Cost on Coverhead Rate & Expected Activity) Purchase orders lost oh (overhead Ratex Expected Activity) General factory overhead #4 2340 (9x260) 27.000 | (25x1080) 84480 (12x740) 113,820 3200 35.56875 (Amt in $) B#3 2340 (9x260) 58000 (25 x 2320) 0,400 1 (1244200) 110,740 210 52.73333 -os L L Total overhead cost for Product No. of units overhead Cost per unit 07 (c) Total Cost Per unit - Particulars Direct Material Add: Direct Labour Add: Over head wit per unit February 2019 Su Mo Tu We Th Aftu 36:50 28.30 35.57 100.37 B #3 46.50 57.30 52.73 157. 13 Fr 1 Sa Su Mo Tu We Th Fr Sa 2 3 4 5 6 7 8 9 17 18 19 20 21 22 23