Your company makes Product 1 and Product 2 using Activity A and Activity B. The cost...
- Your company makes Product 1 and Product 2 using Activity A and
Activity B. The cost driver for Activity A is direct labor hours
and the cost driver for Activity B is number of setups. Activity A
costs $125,000 and Activity B costs $675,000. If Product 1 had
activity proportions of 10% for Activity A and 40% for Activity B,
then
- what is the total indirect cost assigned to Product 1?
- what is the total indirect cost assigned to Product 2?
- Your company makes Product 1 and Product 2 using Activity A and
Activity B. The cost driver for Activity A is direct labor hours
and the cost driver for Activity B is number of setups. Product 1
requires 800 direct labor hours and 70 setups, but Product 2
requires 400 direct labor hours and 90 setups. If Activity A had an
activity rate of $13 per direct labor hour and Activity B had an
activity rate of $24 per setup, then
- what is the total indirect cost assigned to Product 1?
- what is the total indirect cost assigned to Product 2?
- Your company makes Product 1 using Activity A and Activity B.
The cost driver for Activity A is direct labor hours and the cost
driver for Activity B is number of setups. Activity A has an
activity rate of $10 per direct labor hour and Activity B has an
activity rate of $150 per setup. One unit of Product 1 is sold for
$200, requires $30 of direct materials and $60 of direct labor, and
uses 8 direct labor hours and 4 setups. If your company sells 50
units of Product 1, then what is
- the total manufacturing cost per unit?
- the gross profit per unit?
Homework Answers
1.
a. Indirect costs assigned to Product 1 = $125000 x 10% + 675000 x
40% = $282,500
b. Indirect costs assigned to Product 1 = $125000 x 90% + 675000 x
60% = $517,500
2.
a. Indirect costs assigned to Product 1 = 800 x $13 + 70 x $24 =
$12080
b. Indirect costs assigned to Product 1 = 400 x $13 + 90 x $24 =
$7360
3.
Overhead assigned = 8 x $10 + 4 x $150 = $680
Overhead per unit = $680 / 50 = $13.60
a. Total Manufacturing Cost per unit = $30+60+13.60 =
$103.60
b. Gross Profit per unit = $200 - 103.60 = $96.40 per unit
If you have any query, kindly comment with your query and please mark thumbs up.
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