Question

Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $20 per unit and $45 is used in direct labor, while the direct material for the double is $35 per unit, and the labor cost is $45 per unit. Box Springs estimates it will make 5,000 twins and 10,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows: Activity Cost Pools Estimated Overhead Use per Twin Use per Double Driver Framing Square Feet of Pine $200,000 210,000 6,000 110,000 2,000 100,000 Padding Square Feet of Quilting Filling 340,000 500,000 350,000 Square Feet of Filling Number of Boxes Labeling 120,000 190,000 850,000 13,000 350,000 6,000 Inspection Number of Inspections How much does each unit cost to manufacture? Do not round intermediate computations but round final answers for the fields below to the nearest whole number. Total Cost per Unit Twin Double Direct Material Direct Labor Cost Overhead Total per Unit

Answer 1

Twin Total Cost per unit Direct material Direct Labour Overhead (WN) Total Per Unit Atten 20.00 45.00 135.00 200.00 Double $ 35.00 $ 45.00 $ 39 $ 119 Working note : Computation of overhead per unit under Activity based costing Activity cost pools Framing Padding Filling labelling Inspection AAAAA Estimated Overhead 2,00,000.00 2,10,000.00 3,40,000.00 1,20,000.00 1,90,000.00 Usage Overhead rate per activity 8000 $ 25.00 Per square feet pine 210000 $ 1.00 Per square feet quilting 850000 $ 0.40 Per square feet filling 1200000 $ 0.10 Per Box 19000 $ 10.00 Per inspection usage Activity cost pools Framing Padding Filling labelling Inspection Twin Overhead rate per activity usage Overhead cost 25.00 6000 $ 1,50,000.00 1.00 110000 $ 1,10,000.00 0.40 500000 $ 2,00,000.00 0.10 850000 $ 85,000.00 10.00 13000 $ 1,30,000.00 सीजीपी Double Overhead cost 2000 50,000.00 100000 1,00,000.00 350000 1,40,000.00 350000 35,000.00 6000 60,000.00 Total Overhead No of Units Per Unit 6,75,000.00 5000 135.00 3,85,000.00 10000 38.50 $