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Exercise 5-28 Activity-Based Costing [LO 5-2,5-3] Hakara Company has been using direct labor costs as the...

Exercise 5-28 Activity-Based Costing [LO 5-2,5-3] Hakara Company has been using direct labor costs as the basis for assigningRequired: 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal pla

Exercise 5-28 Activity-Based Costing [LO 5-2,5-3] Hakara Company has been using direct labor costs as the basis for assigning overhead to its many products. Under this allocation system, product A has been assigned overhead of $22.86 per unit, while product B has been assigned $7.39 per unit. Management feels that an ABC system will provide a more accurate allocation of the overhead costs and has collected the following cost pool and cost driver information: Cost Pools Machine setup Materials handling Electric power Activity Costs Cost Drivers $516,000 Setup hours 105,000 Pounds of materials 26,000 Kilowatt-hours Activity Driver Consumption 6,000 21,000 26,000 The following cost information pertains to the production of A and B just two of Hakara's many products: Number of units produced Direct materials cost Direct labor cost Number of setup hours Pounds of materials used Kilowatt-hours 5,000 20,000 $31,000 $29,000 $30,000 $40,000 200 100 1,000 2,000 4,000 2,000
Required: 1. Use activity-based costing to determine a unit cost for each product. (Round your final answers to 2 decimal places.) Product A Product B Cost per Unit $ 18.44 X $ 5.76 %
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Solutions dipu - a) cost pools Activity costs ($) cost briver units overhead Rate (8) machine setup 516000 6000 86 105000 | 2cost per unit calculation of particulars Direct material B (0) 29,000 31000 Direct labour 30,000 40,000 overhead: - Machine d

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