Pincott Industries has provided the following data from its activity-based costi
ID: 2341939 • Letter: P
Question
Pincott Industries has provided the following data from its activity-based costing system: Activity Cost Pools Est. Overhead Cost Assembl Processing orders Inspection Expected Activit 44,000 Machine hours $498,520 S54,263 S77,589 1,100Orders 1,110 Inspection hours Data concening Pincott'sproductLB28 appears below: Number ofunits produced Machine hours Number of orders Inspection hours Direct materials cost Direct labor cost 430 990 70 20 $37.74 per unit $10.45 per unit Calculate the total unit product cost ofLB28 (Step 1: Determine activity rates for each activity pool Step 2: Determine overhead costs charged to product LB28 Step3: Add up all product costs for LB28 Step 4: Determine unit product cost)Explanation / Answer
Requirement 1
Cost Drivers Rate
Activity
Cost Drivers
Total Activity Amount (A)
Level of Activity (B)
Activity Rate (C=A/B)
Assembly
Machine Hours
$ 498,520.00
44000.00
$ 11.33
Per Machine Hour
Processing Orders
Number of Orders
$ 54,263.00
1100.00
$ 49.33
Per Order
Inspection
Number of Inspections Hours
$ 77,589.00
1110.00
$ 69.90
Per Inspection Hour
$ 630,372.00
Requirement 2
Total Overheads applied
Product LB28
Activity rate(A)
Activity Driver Incurred (B)
Overhead Assigned (C=A*B)
Assembly
$ 11.33
990
$ 11,216.70
Processing Orders
$ 49.33
70
$ 3,453.10
Inspection
$ 69.90
20
$ 1,398.00
Total Overheads applied
$ 16,067.80
Production
430.00
Overhead cost per unit
$ 37.37
Requirement 3
Total Product Cost
Per unit
Number of Units
Direct Materials cost
$ 37.74
$ 16,228.20
Direct Labor Cost
$ 10.45
$ 4,493.50
Overheads applied
$ 16,067.80
Total Cost
$ 36,789.50
Requirement 4-Cost per unit
Total Product Cost
Number of Units
Direct Materials cost
$ 16,228.20
Direct Labor Cost
$ 4,493.50
Overheads applied
$ 16,067.80
Total Cost
$ 36,789.50
Production units
430
Cost per Unit
$ 85.56
Cost Drivers Rate
Activity
Cost Drivers
Total Activity Amount (A)
Level of Activity (B)
Activity Rate (C=A/B)
Assembly
Machine Hours
$ 498,520.00
44000.00
$ 11.33
Per Machine Hour
Processing Orders
Number of Orders
$ 54,263.00
1100.00
$ 49.33
Per Order
Inspection
Number of Inspections Hours
$ 77,589.00
1110.00
$ 69.90
Per Inspection Hour
$ 630,372.00