Homework Answers
| Machine Setups = $342955/797 =430.307 | ||||
| Qyuality Inspection =$253593/14115 =17.9662 | ||||
| Calculation of selling price | ||||
| Direct Material | $ 42,570 | |||
| (946 kg*$45) | ||||
| Direct Labor | $ 4,906 | |||
| (223 hours *$22) | ||||
| Manufacturing Overhead | ||||
| 6 Machine Setups*$430.307 | $ 2,582 | |||
| 23 Quality inspection *$17.9662 | $ 413 | |||
| Total Cost | $ 50,471 | |||
| Markup 50% | $ 25,236 | |||
| Selling Price | $ 75,707 | |||
| Correct Option : c | ||||
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Southwest Components recently switched to activity-based costing from the department allocation method. The Fabrication Department manager...
Southwest Components recently switched to activity-based costing
from the department allocation method. The Fabrication Department
manager has estimated the following cost drivers and rates:
Activity Centers
Cost Drivers
Rate per
Cost Driver Unit
Materials handling
Pounds of material handled
$
15
per pound
Quality inspections
Number of inspections
$
230
per inspection
Machine setups
Number of machine setups
$
2,700
per setup
Running machines
Number of machine-hours
$
22.00
per hour
Direct materials costs were $304,000 and direct labor costs...
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Southwest Components recently switched to activity-based costing
from the department allocation method. The Fabrication Department
manager has estimated the following cost drivers and rates:
Activity Centers
Cost Drivers
Rate per
Cost Driver Unit
Materials handling
Pounds of material handled
$
15
per pound
Quality inspections
Number of inspections
$
230
per inspection
Machine setups
Number of machine setups
$
2,700
per setup
Running machines
Number of machine-hours
$
22.00
per hour
Direct materials costs were $304,000 and direct labor costs...
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