Question
Debra reviewed last years product cost information for the companys 1.7 cubic foot (dorm-sized) mini refrigerator. Although Debra noted the total cost at $36.04/unit, the
Debra reviewed last years product cost information for the companys 1.7 cubic foot (dorm-sized) mini refrigerator. Although Debra noted the total cost at $36.04/unit, the breakdown for each type of cost was not there. This was disappointing, as she wanted to compare her current detail to last years. To support this years unit cost, she gathered the following production data and key activity data from the plant. Surely something similar had been done last year?
Activity | Cost | Total Quantity of Cost Driver | Quantity Used by Mini Fridge | ||||
---|---|---|---|---|---|---|---|
Materials handling | $248,000 | 80,000 | pounds of material moved | 13,800 | |||
Assembly | 400,000 | 50,000 | direct labor hours | 14,600 | |||
Quality control | 160,000 | 25,000 | number of inspections | 2,400 |
Additional Detail for Mini Fridge | ||
---|---|---|
Total direct materials costs | $282,500 | |
Total direct labor costs | $382,500 | |
Units produced | 25,000 |
Debra determined that the previous accountant had not analyzed MOH costs by key activity at all. Instead, he had used just one MOH cost pool and one allocation base. Given that few changes had occurred in production, which of the listed cost drivers was likely used to calculate last years single MOH rate? (Round answers to 2 decimal places, e.g. 15.25.)
MOH per Unit | ||
---|---|---|
Materials handling | $ | |
Assembly | $ | |
Quality control | $ |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started