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Rapid City Technology, Inc. manufactures chemicals used in agricultural pest control. The controller for Rapid City Technology, Inc. has established the following activity cost pools
Rapid City Technology, Inc. manufactures chemicals used in agricultural pest control. The controller for Rapid City Technology, Inc. has established the following activity cost pools and cost drivers. |
Activity Cost Pool | Budgeted Overhead Cost | Cost Driver | Budgeted Level for Cost Driver | Pool Rate | ||||||
Machine setups | $ | 1,000,000 | Number of setups | 250 | $ | 4,000 | per setup | |||
Material handling | 300,000 | Weight of raw material | 75,000 | Ib. | $ | 4 | per pound | |||
Hazardous waste control | 100,000 | Weight of hazardous chemicals used | 10,000 | Ib. | $ | 10 | per pound | |||
Quality control | 300,000 | Number of inspections | 2,000 | $ | 150 | per inspection | ||||
Other overhead costs | 800,000 | Machine hours | 40,000 | $ | 20 | per machine hour | ||||
Total | $ | 2,500,000 | ||||||||
Required: | |
1. | Calculate the unit cost of a production order for 100 specially coated containers used in transporting chemicals. In addition to direct material costing $210 per container and direct labor costing $60 per container, the order requires the following: |
Machine setups | 4 | |
Raw material | 800 | pounds |
Hazardous materials | 400 | pounds |
Inspections | 4 | |
Machine hours | 60 | |
Q1 Unit cost ? (per container) |
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