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Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses
Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver. Activity Cost Pool Selling price Direct materials Direct labor Espresso Coffee Cups S 20 S 6 S 2 Travel Coffee Mugs S 25 S 8 S 5 Units produced Direct labor hours 10,000 units 10,000 hours 4,000 units 6,000 hours Estimated total overhead costs $ 80,000 Espresso Coffee Cups $5 per direct labor hour $50,000 $13 $7 Travel Coffee Mugs $5 per direct labor hour $30,000 Item #1 - Predetermined overhead rate Item #2 - Total manufacturing overhead allocated Item #3 - Manufacturing cost per unit Item #4 - Gross profit per unit $12.50 $20.50 $7.50 Bluebean Inc. produces two lines of coffee cups: espresso coffee cups and travel coffee mugs. The unit cost information is shown here. The company uses a traditional volume-based costing system and believes that the number of labor hours is the appropriate cost driver Activity Cost Pool Selling price Direct materials Direct labor Espresso Travel Coffee Cups Coffee Mugs S 20 S 25 S 6 S 8 $ 2 S 5 Units produced Direct labor hours 10,000 units 10,000 hours 4,000 units 6,000 hours Estimated total overhead costs $ 80,000 Espresso Coffee Cups $5 per direct labor hour $50,000 $13 $7 Travel Coffee Mugs $5 per direct labor hour $30,000 Item #1 - Predetermined overhead rate Item #2 - Total manufacturing overhead allocated Item #3 - Manufacturing cost per unit Item #4 - Gross profit per unit $13.00 $4.50 $7.50
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