Question
A manufacturer manufactures two types of engineering diagnostic equipment used in construction. The two products are based on different technologies, x-ray and ultrasound, but are
A manufacturer manufactures two types of engineering diagnostic equipment used in construction. The two products are based on different technologies, x-ray and ultrasound, but are manufactured in the same factory. The manufacturer has computed the manufacturing cost of the x-ray and ultrasound products by adding together direct materials, direct labor, and overhead cost applied based on the number of direct labor hours. The factory has three overhead departments that support the single production line that makes both products. Budgeted overhead spending for the departments is as follows:
Department
Engineering Material Handling Setup Total 8,500 6,500 4,000 19,000
Budgeted manufacturing activities and costs for the period are as follows: Activity X-Ray Ultrasound Units produced and sold 40 75 Direct materials used $60,000 $100,000 Direct labor hours used 30 130 Direct labor cost $50,000 $130,000 Number of parts used 400 600 Number of engineering changes 3 Number of product setups 2 8
The budgeted cost to manufacture one ultrasound machine using the activity-based costing method is
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started