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3. .Frase Corp is manufacturing marbles in two types TYPE1 and TYPE2. These two product and the company has the following cost structure. The company
3. .Frase Corp is manufacturing marbles in two types TYPE1 and TYPE2. These two product
and the company has the following cost structure. The company is using Activity Based
Costing method.
Overhead Activities Activity Cost Cost driver
Machine Setup $180.000 1500 setup hours
Materials Handling $ 50.000 12500 pounds of mat. Hand.
Generating electric power for production $20.000 20000 kilowatt hours
TYPE1 TYPE2
Number of units produced 10.000 20.000
Direct materials cost $20.000 $ 25.000
Direct labor cost $ 12.000 $ 20.000
Number of setup hours 100 120
Pounds of materials used 500 1500
Kilowatt-hours used 1000 2000
a. What is the total cost for TYPE1 and TYPE2 (10 points)
b. WHat is the cost per unit for TYPE1 and TYPE2
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