Activity-Based Costing Hakara Company has identified the following overhead cost pools and cost drivers:
Cost Pools | Activity Costs | Cost Driver | Driver Consumption |
Machine setup | $360,000 | Setup hours | 3,000 |
Materials handling | 100,000 | Pounds of materials | 25,000 |
Electric power | 40,000 | Kilowatt-hours | 40,000 |
The following cost information pertains to the production of two of its products, A and B:
| A | B |
Number of units produced | 4,000 | 20,000 |
Direct materials cost | $40,000 | $50,000 |
Direct labor cost | $24,000 | $40,000 |
Number of setup hours | 200 | 240 |
Pounds of materials used | 1,000 | 3,000 |
Kilowatt-hours | 2,000 | 4,000 |
Required Use activity-based costing to calculate the unit cost for each product.
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