Question
Information about a company's two products is found below. Direct Labor-Hours per Unit Annual Production Product A 0.50 19,000 units Product B 0.10 43,000 units
Information about a company's two products is found below.
Direct Labor-Hours per Unit | Annual Production | |
Product A | 0.50 | 19,000 units |
Product B | 0.10 | 43,000 units |
Additional information about the company follows:
a. Direct materials per unit is $29 for Product A and $11 for Product B.
b. The direct labor wage rate is $16 per hour.
c. Product A requires a special process that is not required for Product B.
d. The following activity cost pools are used by the company's ABC system.
Estimated | Expected Activity | ||||
Activity Cost Pool (and Activity Measure) | Overhead Cost | Product A | Product B | Total | |
Machine setups (number of setups) | $ | 18,900 | 100 | 80 | 180 |
Special process (machine-hours) | $ | 188,000 | 4,700 | 0 | 4,700 |
General factory (Direct labor-hours) | $ | 151,800 | 9,500 | 4,300 | 13,800 |
Required:
1. For each activity cost pool, calculate the activity rate.
- Required 1
- Required 2
For each activity cost pool, calculate the activity rate.
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2. Using ABC costing, determine the total cost per unit of Product A and Product B.
Using ABC costing, determine the total cost per unit of Product A and Product B. (Do not round intermediate calculations. Round your answers to 2 decimal places.)
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