Question

Soved Help Save Sheen Co. manufacturers laser printers. It has outlined the following overhead cost drivers: Overhead Costs Pool Quality control Machine operation Materials handling Miscellaneous overhead cost Cost Driver Number of inspections Machine hours Number of batches Direct labor hours Overhead Cost $ 80,000 180,000 1,200 63,000 Budgeted Level for Cost Driver 1,600 1,500 30 6,300 Sheen Co. has an order for 1,000 laser printers that has the following production requirements: Number of inspections Machine hours Number of batches Direct labor hours 150 275 6 840 What is the total overhead cost per unit of the laser printers order using activity-based costing? (Rounded to the nearest cent < Prev 4 of 6 Next > earch

Answer 1

Answer: $49.14

Explanation

Computation of total overhead cost per unit of the
laser printers order using activity-based costing
Overhead Costs Pool	OH Allocation Rate
Quality control	$   80,000.00	/	1,600.00	=	50.00
Machine operation	$ 180,000.00	/	1,500.00	=	120.00
Materials handling	$     1,200.00	/	30.00	=	40.00
Miscellaneous overhead cost	$   63,000.00	/	6,300.00	=	10.00
Total overhead cost per unit using activity-based costing
= [($50*150) + ($120*275) +( $40*6) + ($10*840)] / 1,000
= (7,500 + 33,000 + 240 + 8,400) / 1,000
= 49,140 / 1,000
= $49.14