Question

Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: points Activity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory Activity Rates $ 8.00 per direct labor-hour $ 9.00 per machine-hour $ 80.00 per setup $ 200.00 per order $ 190.00 per shipment $ 9.00 per direct labor-hour eBook Hint Print Cost and activity data have been supplied for the following products: References Direct materials cost per unit Direct labor cost per unit Number of units produced per year $ $ J78 7.50 4.50 1,000 B52 $44.00 $ 4.00 400 Total Expected Activity J78 1,100 2,300 Direct labor-hours Machine-hours Machine setups Production orders Shipments NNNW 12 Required: Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 Joelle.

Answer 1

3.

	J78		B52
Direct Materials	7.5*1000	7500	44*400	17600
Direct Labor	4.5*1000	4500	4*400	1600
Prime Cost		12000		19200
Overheads
Labor related	8*1100	8800	8*30	240
machine hour related	9*2300	20700	9*30	270
Set ups	5*80	400	2*80	160
Production orders	4*200	800	2*200	400
Shipments	12*190	2280	2*190	380
General factory	9*1100	9900	9*30	270
Total Production Costs		54880		20920
No of units produced Given	Given	1000		400
Unit product cost	54880/1000	54.88	20920/400	52.30

4.

1.

Overhead Costs (A)	Activty (B)	Activity Rate (A/B)
390600	43400	9
8600	215	40
94160	107	880
60550	1730	35
220800	18400	12

2.

Activity	Activity Rate (as computed above)	Product A		Product B		Product C		Product D
		Expected Activity	expected activity * Activity rate	Expected Activity	expected activity * Activity rate	Expected Activity	expected activity * Activity rate	Expected Activity	expected activity * Activity rate
Labour related	9	5800	52200	28400	255600	4800	43200	4400	39600
Purchase orders	40	71	2840	20	800	43	1720	81	3240
Parts Management	880	28	24640	20	17600	42	36960	17	14960
Board Etching	35	310	10850	770	26950	650	22750	0	0
General factory	12	2500	30000	6400	76800	4000	48000	5500	66000
TOTAL OVERHEAD COST			120530		377750		152630		123800

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