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Two-Stage ABC for Manufacturing Merlot Company has determined its activity cost pools and cost drivers to be the following: Cost poolsSetup$ 56,000Material handling12,800Machine operation240,000Packing60,000Total indirect

Two-Stage ABC for Manufacturing

Merlot Company has determined its activity cost pools and cost drivers to be the following:

Cost poolsSetup$ 56,000Material handling12,800Machine operation240,000Packing60,000Total indirect manufacturing costs$ 368,800Cost driversSetups400Material moves800Machine hours16,000Packing orders1,000

One product made by Merlot, metal casements, used the following activities during the period to produce 500 units:

Setups20Material moves80Machine hours1,900Packing orders150

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Two-Stage ABC for Manufacturing Merlot Company has determined its activity cost pools and cost drivers to be the following: Cost pools Setup 5 55.000 Material handllng _ 12.300 Machine operation _ 240.000 Packing . 00.000 Total Indirect manufacturing costs $ 368.800 Cost drivers Setups 400 Material moves B00 Machine hours 16.000 Packing orders ' 1.000 One product made by Merlot. metal casements. used the following activities during the period to produce 500 units: Setups 20 Material moves 30 Machine hours 1.900 - Packing orders 150 (a) Calculate the cost per unit of activity for each activity cost pool for Merlot company. Setup 5 6.400 at Material handling 1: 3.200 at Machine operation 5 45,600 3 Packing S 1500 it [0) Calculate the manufacturing overhead cost per metal casement manufactured during the period. Round your answer to the nearest cent. $ 125.4 8

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