Problem

Activity-Based Costing Hakara Company has identified the following overhead cost pools and...

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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Solutions For Problems in Chapter 5