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MedTech, Inc., manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials
MedTech, Inc., manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $29 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 342,105 units for the year: Activity(Cost Driver)...BudgetedCosts for 2010....Cost Driver Used as Allocation Base....Cost Allocation Rate Materials handling...... $ 5,400,000............... Number of parts used .............$ 1.00 per part Milling and grinding..... 9,000,000............... Number of machine hours ........ 11.00 per hour Assembly and inspection..6,100,000.............. Direct labor hours worked........ 4.00 per hour Testing ........................1,300,000 ............. Number of units tested ............ 3.80 per unit The following production, costs, and activities occurred during the month of August: Units Produced/Tested...Direct Materials Costs...Numberof Parts Used....Machine Hours Direct...Labor Hours 59,000....................... $3,700,000 .................295,000...................... 98,000..................... 175,000 a) Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech, Inc. (Round "Cost per unit" to 2 decimal places. Omit the "$" sign in your response.) Total manufacturing cost $ Cost per unit produced and tested $
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