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Sparrow Manufacturing manufactures small parts and uses an activity-based costing system. Activity Est. Indirect Activity Costs Allocation base Cost allocation rate Materials $70,000 Material moves
Sparrow Manufacturing manufactures small parts and uses an activity-based costing system.
Activity | Est. Indirect Activity Costs | Allocation base | Cost allocation rate |
Materials | $70,000 | Material moves | $2.00/move |
Assembling | $240,000 | Direct labor hours | $8.00/dir. labor hour |
Packaging | $80,000 | # of finished units | $0.80/finished unit |
The following parts were produced in October with the following information:
Part | # Produced | Materials Costs | # Moves | Dir. Labor Hrs. |
A | 2,500 | $2,500 | 800 | 200 |
B | 3,500 | $7,000 | 1,500 | 300 |
C | 4,500 | $11,250 | 2,200 | 1,000 |
Total unit cost for part B is:
Select one:
a. $4.34.
b. $3.08.
c. $6.06.
d. $2.34.
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