Question
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
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 CookerCharcoal 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:
ActivityCostCost Driver Materials acquisition and inspection $ 30,800 Amount of direct materials cost Materials movement 16,200 Numbers of batch moves Scheduling 36,000 Number of batches $ 83,000
Rounding instructions:Do not round until your final answers. Round total cost answersto the nearest dollar andper unitanswers to the nearest cent.
(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.
HINT: Use 1.6939 for overhead rate calculations.
(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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