Homework Answers
(1)
| Unit Cost | |
| Model A | $173.21 |
| Model B | $261.88 |
| Model A | Model B | |
| Direct Materials | $635000 | $810000 |
| Direct Labor | $477000 | $466000 |
| Overhead |
(5400 * $300.88) =$1624752 |
(2200 * $300.88) =$661936 |
| Total | $2736752 | $1937936 |
| Units | 15800 | 7400 |
| Unit cost | $173.21 | $261.88 |
Overhead Rate per Direct Labor hour = Total Overhead/Total Direct Labor hour
Total overhead = $451920 + $382800 + $957000 + $495000 = $2286720
Total DL hour = 5400 + 2200 = 7600
Rate per hour = $2286720/7600 = $300.88
(2)
| Unit Cost | |
| Model A | $142.87 |
| Model B | $326.67 |
| Model A | Model B | |
| Direct Materials | $635000 | $810000 |
| Direct Labor | $477000 | $466000 |
| Overhead: | ||
| Setting up Equipment |
(390* $807) =$314730 |
(170* $807) =$137190 |
| Ordering costs |
(6300* $22) =$138600 |
(11100* $22) =$244200 |
| Machine costs |
(24500 * $22) =$539000 |
(19000* $22) =$418000 |
| Receiving |
(3400* $45) =$153000 |
(7600* $45) =$342000 |
| Total | $2257330 | $2417390 |
| Units | 15800 | 7400 |
| Unit cost | $142.87 | $326.67 |
| Activity | Cost (a) | Capacity (b) |
Cost per activity driver (a/b) |
|
| Setting up Equipment | $451920 | 560 setups | $807 | |
| Ordering costs | $382800 | 17400 orders | $22 | |
| Machine costs | $957000 | 43500 machine hours | $22 | |
| Receiving | $495000 | 11000 receiving hours | $45 | |
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