P4. Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material...
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P4. Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 is used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows below. How much does each unit cost to manufacture? Activity Cost Pools Framing Padding Filling Labeling Inspection Activity Cost Pool Driver Estimated Overhead Use per Twin Use per Double Square feet of pine 210,000 5,000 2,000 Square feet of quilting 220,000 120,000 100,000 Square feet of filling 320,000 500,000 300,000 Number of boxes Number of inspections 240,000 800,000 400,000 170,000 12,000 5,000 Cost Driver Estimated Overhead Total Driver Activity Rate Activity Cost Pool Activity Rate Twin Usage Cost per Twin Double Usage Cost per Double Framing Padding Filling Labeling Inspection Total Number of Units Overhead per unit Total Cost Per Unit Twin Double Total per unit P4. Box Springs, Inc., makes two sizes of box springs: twin and double. The direct material for the twin is $25 per unit and $40 is used in direct labor, while the direct material for the double is $40 per unit, and the labor cost is $50 per unit. Box Springs estimates it will make 5,000 twins and 9,000 doubles in the next year. It estimates the overhead for each cost pool and cost driver activities as follows below. How much does each unit cost to manufacture? Activity Cost Pools Framing Padding Filling Labeling Inspection Activity Cost Pool Driver Estimated Overhead Use per Twin Use per Double Square feet of pine 210,000 5,000 2,000 Square feet of quilting 220,000 120,000 100,000 Square feet of filling 320,000 500,000 300,000 Number of boxes Number of inspections 240,000 800,000 400,000 170,000 12,000 5,000 Cost Driver Estimated Overhead Total Driver Activity Rate Activity Cost Pool Activity Rate Twin Usage Cost per Twin Double Usage Cost per Double Framing Padding Filling Labeling Inspection Total Number of Units Overhead per unit Total Cost Per Unit Twin Double Total per unit
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