HughesAerospace Components Ltd. manufactures metal components for aircraft. The companys main process is stamping sheet metal into parts that are used for the body of the aircraft. The companys process consists of two departments:stamping and finishing. Hughes uses a normal costing system and has collected the following budgeted data for fixed manufacturing overhead:

Department Fixed manufacturing OH Cost driver Practical capacity Average activity level Planned activity level

Stamping $1,680,000 Machine hours 14,000 9,400 11,200

Finishing $630,000 Labour hours 11,000 6 ,500 9 ,500

The companys research and development department has just designed a lightweight component using new technology. Due to lack of competition, the marketing department has decided to price the component based on the total manufacturing cost plus a markup of 40%

.The following is a list of variable costs by departmentrelatedto the new component

:Stamping:Direct materials$6.75 per component

Direct labour$28.00 per hour and 0.8 hours per component

Variable overhead$35.00 per machine hour and 0.25 machine hours per component

Finishing:

Direct materials$3.75 per component

Direct labour$32.00 per hour and 1.1 direct labour hours

Variable overhead$22.00 per direct labour hour

What is the price per component if Hughes allocates fixed manufacturing costs based on 19,000 direct labour hours(roundedto the nearest cent)on a plant-wide basis?

a)$323.40

b)$387.25

c)$464.87

d)$491.82

5. Hughes Aerospace Components Ltd. manufactures metal components for aircraft. The company's main process is stamping sheet metal into parts that are used for the body of the aircraft. The company's process consists of two departments: stamping and finishing. Hughes uses a normal costing system and has collected the following budgeted data for fixed manufacturing overhead: Fixed Planned manufacturing Practical Average activity Department overhead Cost driver capacity activity level level Stamping $1,680,000 Machine hours 14,000 9,400 11,200 Finishing $ 630,000 Labour hours 11,000 6,500 9,500 The company's research and development department has just designed a lightweight component using new technology. Due to lack of competition, the marketing department has decided to price the component based on the total manufacturing cost plus a markup of 40%. The following is a list of variable costs by department related to the new component: Stamping: Direct materials $6.75 per component Direct labour $28.00 per hour and 0.8 hours per component Variable overhead $35.00 per machine hour and 0.25 machine hours per component Finishing: Direct materials Direct labour Variable overhead $3.75 per component $32.00 per hour and 1.1 direct labour hours $22.00 per direct labour hour What is the price per component if Hughes allocates fixed manufacturing costs based on 19,000 direct labour hours (rounded to the nearest cent) on a plant-wide basis? a) $323.40 b) $387.25 c) $464.87 d) $491.82