Question

Ravelo Corporation has provided the following data from its activity-based costing system: 8 01:55:06 Activity Cost Pools Assembly Processing orders Inspection Estimated Overhead Cost Expected Activity $502,520 46,000 machine-hours $ 56,263 1,300 orders $ 79,589 1,310 inspection-hours Data concerning the company's product L19B appear below: 470 1,030 110 Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost 60 $41.74 per unit $14.45 per unit According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.) Multiple Choice

Answer 1

(1)Calculation of activity rate
Activity cost pools	Estimated overhead(a)	Estimated cost driver(b)	activity rates((a)/(b))
Asembly	5,02,520	46000	10.92
Processing order	56,263	1300	43.28
Inspection	79,589	1310	60.75
Calculation of total overhead cost:
Activity cost pools	(a) cost driver	activity rates(b)	cost(a*b)(in$)
Asembly	1030	10.92	11252.08
Processing order	110	43.28	4760.72
Inspection	60	60.75	3645.30
Overhead cost			19658.09
Total units			470.00
Cost per unit (19658.09/470)			41.82
Total unit product cost= material cost+labor cost+overhead cost
Total unit product cost=41.74+14.45+41.82= 98.01
So correct answer is $98.01