Pittinger Company manufactures cuckoo clocks and uses an activity-based costing
ID: 2420697 • Letter: P
Question
Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system to allocate all manufacturing conversion costs. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:
What is the cost of assembling per cuckoo clock?
Select one:
a. $12.50
b. $5.00
c. $3.00
d. $4.50
Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $1.25 per part Machining Machine hours $2.50 per machine hour Assembling Number of parts $0.50 per part Packaging Number of finished units $1.50 per finished unitExplanation / Answer
As the Assembling cost per $0.50 Per part and there are 10 Separate parts so the total cost of assembling is $5.00
b is the correct answer