Question
Q1) (15 pts) Fancy Doors, Inc., produces two types of doors, interior and exterior. Recently, the owners of Fancy Doors have decided to use activity
Q1) (15 pts) Fancy Doors, Inc., produces two types of doors, interior and exterior. Recently, the owners of Fancy Doors have decided to use activity based costing. Information related to Fancy Doors production for the most recent year follows:
| Interior | Exterior |
Unit Sold | 3000 | 2000 |
Direct material cost per unit | 58 | 82 |
Direct manufacturing labor cost per unit | 36 | 36 |
Production Runs | 46 | 92 |
Machine Setups | 60 | 140 |
machine hours | 6000 | 5000 |
After analyzing the indirect cost pool for Fancy Doors, the owners identify three activities as generating indirect costs: production scheduling, machine setup, and assembly. Fancy Doors collected the following data related to the indirect cost activities:
Activity
Production Scheduling | Activity Cost 200,000 |
Production Runs | |
Machine setup | 60,000 | Machine Setups | |
Assembly | 100,000 | Machine Hours |
Calculate the cost of an interior door and an exterior door under an activity-based costing system.
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