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The Sit-N-Spin Corporation manufactures and assembles office chairs. Sit -N-Spin uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of
The Sit-N-Spin Corporation manufactures and assembles office chairs. Sit -N-Spin uses an activity-based costing system to allocate all manufacturing conversion costs. Each chair consists of 30 separate parts totaling $155 in direct materials, and requires 5 hours of machine time to produce. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $1.75 per part Machining Machine hours $2.00 per machine hour Assembling Number of parts $4.50 per part Packaging Number of finished units $3.75 per finished unit What is the cost of assembling per chair? O A. $10.00 O B. $52.50 O C. $135.00 OD $18.75
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