Question

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: nativity Cost Pool Labor-related Machine-related Machine setup Production orders Shipments General factory Activity Rates 7.00 per direct labor-hour $ 7.00 per machine-hour $ 40.00 per setup $ 100.00 per order $ 100.00 per shipment $ 7.00 per direct labor-hour Cost and activity data have been supplied for the following products: encos Direct materials cost per unit Direct labor cost per unit Number of units produced per year 378 $ 5.00 $ 4.50 5,000 $34.00 $5.00 200 To Expected ctivity 352 1.200 50 3,200 20 5 378 Direct labor-hours Machine-hours Machine setup < Prev 3 of 6 !! Next >

Answer 1

Unit Product Cost:

Particulars	J78	B52
Unit Product Cost	$17.62	$46.80

Working:

Calculation cost per unit:

Particulars	J78	B52
Direct Material	$5.00	$34.00
Direct Labour	$4.50	$5.00
Overhead (WN#1,2)	$8.12	$7.80
Total Cost Per Unit	$17.62	$46.80

WN#1, Cost Assigned to J78
Activity Name	Activity Rates	Activity	ABC Cost
(A)	(B)	(A*B)
Labor related	$7.00	1200.00	$8,400.00
Machine related	$7.00	3200.00	$22,400.00
Machine setup	$40.00	5.00	$200.00
Production orders	$100.00	7.00	$700.00
Shipments	$100.00	5.00	$500.00
General factory	$7.00	1200.00	$8,400.00
Total Overhead Applies	$40,600.00
Production (Units)	5000.00
Overhead Per Unit	$8.12

WN#2, Cost Assigned to B52
Activity Name	Activity Rates	Activity	ABC Cost
(A)	(B)	(A*B)
Labor related	$7.00	50.00	$350.00
Machine related	$7.00	20.00	$140.00
Machine setup	$40.00	3.00	$120.00
Production orders	$100.00	3.00	$300.00
Shipments	$100.00	3.00	$300.00
General factory	$7.00	50.00	$350.00
Total Overhead Applies	$1,560.00
Production (Units)	200.00
Overhead Per Unit	$7.80