CMA5-3

Chapter 5 Activity-Based Costing CMAS-J. Pelder Products Company manufactures two types of enginering diagnostic equipment used in construction. The two products are based upon different technologies, x-ray and u are manufactured in the same factory. Pelder has computed the manufacturing ultra-sound based on the number of direct labor hours. The fac the single production line that makes both products, Budgeted overhead spending 1 ments is as follows. ltra-sound, but cost of the x-ray and products by adding together direct materials, direct labor, and overhead cost applied tory has three overhead departments that support or the depart- Department Engineering design Material handling Setup Total $6,000 $5,000 $3,000 $14,000 Pelder's budgeted manufacturing activities and costs for the period are as follows. Product Activity Units produced and sold Direct labor hours used Number of parts used Ultra-Sound X-Ray 50 100 400 8 100 $8,000 300 $12,000 600 The budgeted cost to manufacture one ultra-sound machine using the activity-based costing method is a. $225. b. $264. c. $293. d $305