Question
Archada Company manufactures a variety of products. Its job-order costing system uses an activity-based approach. There are two direct-cost categories (direct materials and direct labor)
Archada Company manufactures a variety of products. Its job-order costing system uses an activity-based approach. There are two direct-cost categories (direct materials and direct labor) and three indirect cost pools. The cost pools represent three activity areas at the plant.
Manufacturing Activity Area | Budgeted Cost for 2021 | Cost driver used as allocation base | Cost allocation rate |
Materials Handling | 200,000 | Parts | $0.25 |
Cutting | 2,000,000 | Parts | $2.50 |
Assembly | 2,000,000 | Direct Labor hours | $25.00 |
Two styles of products were produced in January , its first month of operations, the Venus, and the Mars. Their quantities, direct materials costs, and other data from January 2021 are as follows
Units produced | Direct materials costs | Number of parts | Direct manufacturing labor hours | |
Venus | 5,000 | $590,000 | 100,000 | 7,500 |
Mars | 2,000 | $200,000 | 12,000 | 3,000 |
The direct labor rate is $30 per hour. In January, Venus products were sold for $360.00 per unit while Mars products were sold for $280.00 per unit.
For Venus products:
Q1 - Compute the total cost of materials handling charged in January. *
Q2 - Compute the total cost of cutting charged in January. *
Q3 - Compute the total cost of the assembly charged in January. *
Q4 - Compute the total cost per unit. *
Q5 - Compute the total amount of the gross profit. *
For Mars Products:
Q1 - Compute the total cost of materials handling charged in January. *
Q2 - Compute the total cost of cutting charged in January. *
Q3 - Compute the total cost of the assembly charged in January. *
Q4 - Compute the total cost per unit. *
Q5 - Compute the total amount of the gross profit. *
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