Question
Drilling Company uses activity-based costing and provides this information: Manufacturing Activity Cost Driver Driver Rate Materials handling Number of parts $ 0.4 Machinery Number of
Drilling Company uses activity-based costing and provides this information:
Manufacturing Activity | Cost Driver | Driver Rate | ||
Materials handling | Number of parts | $ | 0.4 | |
Machinery | Number of machine hours | 49 | ||
Assembly | Number of parts | 2.75 | ||
Inspection | Number of finished units | 28 | ||
Drilling has just completed 78 units of a component for a customer. Each unit required 98 parts and 2.90 machine hours. The prime cost is $1,280 per finished unit. All other manufacturing costs are classified as manufacturing overhead.
Required:
1. Compute the total manufacturing costs and the unit costs of the 78 units just completed using ABC costing.
Compute the total manufacturing costs and the unit costs of the 78 units just completed using ABC costing. (Round your intermediate and final answers to 2 decimal places.)
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2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $178 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $298 per unit. Compute the full product cost per unit, including upstream, manufacturing, and downstream activities. Also compute the relative proportion of each main cost category.
In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $178 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $298 per unit. Compute the full product cost per unit, including upstream, manufacturing, and downstream activities. Also compute the relative proportion of each main cost category. (Round your answers to 2 decimal places.)
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