Check m Direct Labor- Hours per Unit Production 0.70 25,000 units 0.30 51,000 un
ID: 2601625 • Letter: C
Question
Check m Direct Labor- Hours per Unit Production 0.70 25,000 units 0.30 51,000 units Annual Hubs Sprockets ed Additional information about the company follows a. Hubs require $32 in direct materials per unit, and Sprockets require $12 b. The direct labor wage rate is $11 per hour, c. Hubs require special equipment and are more complex to manufacture than Sprockets d. The ABC system has the following activity cost pools: ces Estimated Overhead Activity Activity Cost Pool (Activity Measure) Machine setups (number of setups) Special processing (machine-hours) General factory (organization-sustaining) Cost Hubs Sprockets Total 234 0 4, 800 NA 104 130 $ 96,000 4,800 NA 22,230 $216,400 NA Required: 1. Compute the activity rate for each activity cost pool 2. Determine the unit product cost of each product according to the ABC system.Explanation / Answer
DL/PU Prod. Hrs Hubs 0.7 25000 17500 Sprockets 0.3 51000 15300 1 Activity Rate Cost HUBS Sprockets Total Machine Setups 22,230 130 104 234 Rate 95 12,350 9,880 22,230 Special Processing 96,000 4,800 - 4,800 Rate 20 96,000 - 96,000 General Ohs 2,16,400 17,500 15,300 32,800 Rate 6.60 1,15,457 1,00,943 2,16,400 2 Product Cost HUB Sprockets Direct material 8,00,000 6,12,000 Direct Labor 1,92,500 1,68,300 Ohs Machine Setup 12,350 9,880 Special Processing 96,000 Gen Ohs 1,15,457 1,00,943 Total Cost 12,16,307 8,91,123 No of Units produced 25,000 51000 Cost Per unit 48.65 17.47