Product costs, activity-based costing systems. (20-25 minutes)

Combrai Informatique (CI) manufactures and sells computers and computer peripherals to several nationwide retail chains. Marcel Proust is the manager of the printer division. Its two largest selling printers are P-41 and P-63.

The manufacturing cost of each printer is calculated using CIl’s activity-based costing system. CI has one direct-manufacturing cost category (direct materials) and th; following five indirect-manufacturing cost pools: mki25

REQUIRED What is the manufacturing cost of P-41? Of P-63?

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INDIRECT- MANUFACTURING COST POOL 1. Materials handling ALLOCATION BASE Number of parts 2. Assembly management Hours of assembly time 3. Machine insertion of parts 4. Manual insertion of parts 5. Quality testing Number of machine- inserted parts Number of manually inserted parts Hours of quality testing time ALLOCATION RATE EUR 1.20 per part EUR 40 per hour of assembly time EUR 0.70 per machine-inserted part EUR 2.10 per manually inserted part EUR 25 per testing-hour Product characteristics of P-41 and P-63 are as follows: P-63 P-41 Direct materials costs EUR 407.50 EUR 292.10 Number of parts 85 parts 46 parts Hours of assembly time 3.2 hours 1.9 hours Number of machine-inserted parts 49 parts 31 parts Number of manually inserted parts Hours of quality testing 36 parts 15 parts 1.4 hours 1.1 hours