Question

Check my w Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Labor-related $ 10.00 per direct labor-hour Machine-related $ 6.00 per machine-hour Machine setups $ 80.00 per setup Production orders $ 200.00 per order Shipments $ 200.00 per shipment General factory $ 6.00 per direct labor-hour Cost and activity data have been supplied for the following products: J78 852 Direct materials cost per unit $ 2.50 $34.00 Direct labor cost per unit $ 5.00 $10.00 Number of units produced per year 4,000 200 Direct labor-hours Machine-hours Machine setups Production orders Shipments Total Expected Activity 378 B52 1,180 30 2,300 40 6 3 5 NNN Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.) J78 B52 Unit productos

Answer 1

Solution:

Computation of Overhead assigned to products
	J78	B52
Activity cost pool	Activity level used	Activity rate	Cost assigned	Activity level used	Activity rate	Cost assigned
Labor related	1100	10.00	$11,000	30	10.00	$300
Machine related	2300	6.00	$13,800	40	6.00	$240
Machine setup	6	80.00	$480	2	80.00	$160
Production orders	3	200.00	$600	2	200.00	$400
Shipments	5	200.00	$1,000	2	200.00	$400
General Factory	1100	6.00	$6,600	30	6.00	$180
Total Overhead cost assigned		$33,480			$1,680
/ Units produced		4000			200
Overhead cost per unit		$8.37			$8.40

Computation of Unit Product Cost
	J78	B52
Direct Materials	$2.50	$34.00
Direct labor	$5.00	$10.00
Overhead Costs	$8.37	$8.40
Unit product Cost	$15.87	$52.40