Question
Coronado Corporation manufactures safeslarge mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Coronado is analyzing the profitability of
Coronado Corporation manufactures safeslarge mobile safes, and large walk-in stationary bank safes. As part of its annual budgeting process, Coronado is analyzing the profitability of its two products. Part of this analysis involves estimating the amount of overhead to be assigned to each product line. The information shown below relates to overhead.
Mobile Safes | Walk-in Safes | |||||
---|---|---|---|---|---|---|
Units planned for production | 200 | 50 | ||||
Material moves per product line | 300 | 200 | ||||
Purchase orders per product line | 450 | 350 | ||||
Direct labor hours per product line | 800 | 1,700 |
The total estimated manufacturing overhead of $260,000 was comprised of $176,000 for materials handling costs and $84,000 for purchasing activity costs. Under activity-based costing (ABC): (Round answers to 2 decimal places, e.g. 12.25.) What amount of materials handling costs are assigned to:
(a) | One mobile safe |
| each | ||
---|---|---|---|---|---|
(b) | One walk-in safe |
| each |
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