Question

Question 3 International Steel Company has budgeted manufacturing overhead costs of $1,925,000. It has allocated overhead on alatide to the products and hand are estimated to be 100.000 for the current year. The company has decided to experiment with activity-based costing and has created the city cost pools and related t o Activity Centre made heurs, which drives as Cost Driver Estimated Activity Material handling Purchase orders Product testing Machine set-up Machining Number of moves Number of orders Number of tests Number of set-ups Machine hours Estimated Overhead $270,000 $102,000 $418,000 $325,000 $810,000 45,000 moves 1,200 orders 3,800 tests 5,000 set-ups 100,000 machine hours Each unit of the products requires the following: Soft Steel Hard Steel $300 $200 $120 $60 Direct materials costs Direct labour costs Purchase orders Machine set-up Product testing Machining Material handling (a) Ex Your answer is incorrect. Try again decimal places, s. 15.25.) runt of both products. (Nound answers Under traditional product costing using machine hours, calculate the total manufacturing cos Soft Steel Hard Steel 2127 m 1755 aturing cost per unit IN 12:51 PM Q AD

Answer 1

Answer:

Total Budgeted Overhead = $1,925,000

Total Labour Hours = 100000 hours

Predetermined Overhead rate = Total Overhead/Labour Hours

Predetermined Overhead rate = 1,925,000 $\div$ 100000

Predetermined Overhead rate = $19.25

Particulars	Soft Steel	Hard Steel
Direct Materaial Cost	$300	$200
Direct Labor Cost	120	60
Overhead:
($19.25 $\times$ 60); ($19.25 $\times$ 60)	1150	1150
Total manufacturing Cost per Unit	$1,570	$1,410