Bolerjack, Inc., manufactures and sells two products: Product G9 and Product B6.
ID: 2426311 • Letter: B
Question
Bolerjack, Inc., manufactures and sells two products: Product G9 and Product B6. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below:
The direct labor rate is $16.50 per DLH. The direct materials cost per unit is $204.30 for Product G9 and $284.50 for Product B6.
The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity:
The unit product cost of Product B6 under activity-based costing is closest to:
$985.39 per unit
$1,835.44 per unit
$1,917.91 per unit
$1,390.63 per unit
Expected Production Direct Labor-Hours Per Unit Total Direct Labor-Hours Product G9 100 6.0 600 Product B6 500 9.0 4,500 Total direct labor-hours 5,100Explanation / Answer
Answer: $1390.63
Particulars Product B6 per unit Total cost Direct material cost 284.5 142250 284.5*500 Direct labor rate 148.5 74250 148.5*500 Labor related 35.55 159975 35.55*4500 Production orders 60.92 42644 60.92*700 General factory 95.24 276196 95.24*2900 Total cost 624.71 695315 478815 Unit product cost 1390.63 695315/500 units