Question
Consider the following data for two products of Vigano Manufacturing. Activity Budgeted Cost Activity Driver Machine setup $ 16,000 (20 machine setups) Parts handling 12,800
Consider the following data for two products of Vigano Manufacturing.
Activity | Budgeted Cost | Activity Driver |
---|---|---|
Machine setup | $ 16,000 | (20 machine setups) |
Parts handling | 12,800 | (16,000 parts) |
Quality inspections | 19,200 | (100 inspections) |
Total budgeted overhead | $ 48,000 |
Unit Information | Product A | Product B | ||
---|---|---|---|---|
Units produced | 1,600 | units | 320 | units |
Direct materials cost | $ 26 | per unit | $ 36 | per unit |
Direct labor cost | $ 46 | per unit | $ 56 | per unit |
Direct labor hours | 2 | per unit | 2.50 | per unit |
1. Using a plantwide overhead rate based on 4,000 direct labor hours, compute the total product cost per unit for each product. 2. Consider the following additional information about these two products. If activity-based costing is used to allocate overhead cost, (a) compute overhead activity rates, (b) allocate overhead cost to Product A and Product B and compute overhead cost per unit for each, and (c) compute product cost per unit for each.
Actual Activity Usage | Product A | Product B | ||
---|---|---|---|---|
Setups | 8 | setups | 12 | setups |
Parts | 10,000 | parts | 6,000 | parts |
Inspections | 40 | inspections | 60 | inspections |
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Using a plantwide overhead rate based on 4,000 direct labor hours, compute the total product cost per unit for each product.
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