Question
E18-22 Activity-Based Costing and Conventional Costs Compared (LO2,3,4) Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The
E18-22 Activity-Based Costing and Conventional Costs Compared (LO2,3,4) | ||
Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal | ||
Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major | ||
discount stores. Following is information pertaining to the manufacturing costs for the current month. | ||
Gas Cooker | Charcoal Smoker | |
Units | 1,000 | 5,000 |
Number of batches | 40 | 10 |
Number of batch moves | 80 | 40 |
Direct materials | $40,000 | $100,000 |
Direct labor | $22,000 | $27,000 |
Manufacturing overhead follows: | ||
Activity | Cost | |
Materials acquisition and inspection | $30,800 | |
Materials movement | 16,200 | |
Scheduling | 36,000 | |
$83,000 | ||
Required | ||
hint use 1.6939 for overhead rate calculations | ||
a. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for | ||
the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars. | ||
b. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for | ||
the month, assuming manufacturing overhead is assigned using activity-based costing. |
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