Question
Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers
Stockin Company produces Tablets and Books. Total overhead costs traditionally have been allocated on the basis of direct labor hours. After implementing activity-based costing, managers determined the following cost pools and cost drivers. They also decided that general costs should no longer be allocated to products.
Activity Pool | Department Costs | Cost driver | ||
Binding | $219,611.25 | Number of units | ||
Printing | 835,212.00 | Machine hours | ||
Product design | 222,048.00 | Change orders | ||
General | 512,928.75 | None | ||
Total overhead costs | $1,789,800.00 |
TabletsBooksUnits72,30018,075Direct materials cost per unit$4.00$12.00Direct labor cost per unit$5.00$10.00Direct labor hours31,40015,700Machine hours146,400109,800Change orders2,0564,112
Determine the unit product cost for Tablets using the activity-based costing system. (Round answer to 2 decimal places, e.g. 1.64.)
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