Question
Item5 3points eBook Check my workCheck My Work button is now enabled1 Item 5 Solomon Manufacturing produces two keyboards, one for laptop computers and the
Item5
3points
eBook
Check my workCheck My Work button is now enabled1
Item 5
Solomon Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards.
| Activity | Allocation Base | Allocation Rate |
|---|---|---|
| Materials receiving & handling | Cost of material | 1% of material cost |
| Production setup | Number of setups | $ 106.00 per setup |
| Assembly | Number of parts | $ 5.00 per part |
| Quality inspection | Inspection time | $ 1.70 per minute |
| Packing and shipping | Number of orders | $ 9.00 per order |
Activity measures for the two kinds of keyboards follow:
| Labor Cost | Material Cost | Number of Setups | Number of Parts | Inspection Time | Number of Orders | |
|---|---|---|---|---|---|---|
| Laptops | $ 1,320 | $ 5,800 | 30 | 49 | 7,200 minutes | 70 |
| Desktops | 1,210 | 7,800 | 12 | 27 | 4,800 minutes | 20 |
Required
a. Compute the cost per unit of laptop and desktop keyboards, assuming that Solomon made 210 units of each type of keyboard.
|
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Management Accounting Principles And Applications
Authors: Hugh Coombs, D Ellis Jenkins, David Hobbs
1st Edition
1412908434, 978-1412908436
