Swiss Furniture Company manufactures bookshelves and uses an activity−based costing system to allocate all manufacturing conversion...
Swiss Furniture Company manufactures bookshelves and uses an activity−based costing system to allocate all manufacturing conversion costs. The company incurs no direct labor costs. The following information is provided for the month of May:
|
Activity |
Estimated Indirect Activity Costs |
Allocation Base |
Estimated Quantity of Allocation Base |
|
Materials handling |
$7,500 |
Number of parts |
7,080 parts |
|
Assembling |
$11,900 |
Number of parts |
7,080 parts |
|
Packaging |
$2,160 |
Number of bookshelves |
1,180 bookshelves |
Each bookshelf consists of 6 parts. The direct materials cost per bookshelf is $35.
What is the total manufacturing cost per bookshelf?
A.
$18.27
B.
$16.44
C.
$51.44
D.
$53.27
Homework Answers
Calculation of manufacturing cost per bookshelf:
Direct Material =$35
Overheads = Cost*Activity consumed/Total Activity
Material Handling = 7,500*6/7,080 = $6.36
Assembling = 11,900*6/7,080 = $10.08
Packaging = 2,160*1/1,180 = $1.83
Total manufacturing cost per bookshelf = $53.27
Hence, the answer is D.
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