Question

Help Save & Ext Sut Mahaley, Inc., manufactures and sells two products: Product 09 and Product Fo. Date concerning the expected production of each product and the expected total direct labor-hours (DLHS) required to produce that output appear below. Direct Labor- Hours Per Unit 9.4 Total Direct Labor- Expected Production 940 Product 09 Product PO Total direct labor-hours 940 8,836 6,956 15.792 The direct labor rate is $23.20 per DLH. The direct materials cost per unit for each product is given below. Direct Materials Cost per Unit $176.30 $148.10 Product 09 Product FO The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activ Activity Coat Pools Labor-related Machine setups Order size Activity Measures DLHS setups MS Estimated overhead Cost $393,680 50,830 291,700 $736,210 Product 09 Product FO 8,836 6,956 1,000 4,500 900 < Prey 10 of 10

Answer 1

Unit cost of F0:-

DM cost per unit ($148.10 * 940)	$139214
DL cost per unit (7.4 * $23.20 * 940)	$161379.20
Overhead:-
Labor related ($393680/15792*6956)	$173406.67
Machine setup ($50830/1900 * 900)	$24077.37
Order size ($291700/8800 * 4300)	$142535.23
Total cost	$640612.47
Units	940
Cost per unit ($640612.47/940)	$681.50