Question
The following information is provided for Cruzan Rum,Corp. which manufactures two products: Rum and Baileys for use in the VI market. Activity Cost Allocation Base
The following information is provided for Cruzan Rum,Corp. which manufactures two products: Rum and Baileys for use in the VI market.
Activity Cost Allocation Base
Setup $60,000 Number of setups
Machine maintenance 40,000 Number of machine hours
Total direct manufacturing cost $100,000
Rum Baileys Total
Direct labor hours 1,200 3,800 5,000
Number of setups 40 40 80
Number of machine hours 3,000 2,000 5,000
Cruzan Rum plans to provide 250 Rum and 450 Baileys
Requirements
1. Compute the indirect manufacturing costs per unit using direct labor hours to the single plantwide predetermined overhead allocation rate.
2. Compute ABC indirect manufacturing cost per unit for each product.
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