Question

Paparo Corporation has provided the following data from its activity-based costing system: Activity Total Cost Pool Cost Total Activity Assembly $ 891,800 52,000 machine-hours Processing orders $ 80,955 2,100 orders Inspection $ 114,256 1,480 inspection-hours Data concerning the company's product Q79Y appear below: 750 1,180 140 Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost 45 $47.00 per unit $41.41 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to: Multiple Choice O $127.22 per unit O $144.11 per unit O $132.90 per unit O $88.41 per unit

Answer 1

Total Overhead of product Q79Y

= (891,800/52,000)*1180 + (80,955/2100)*140 + (114,256/1480)*45 = 20,237+5397+3474 = 29018

Overhead cost per unit = 29018/750 =38.81

Cost of product = 47 + 41.41 + 38.81

= 127.22 per unit

Option A is the answer

Answer 2

127.22 unit