Wade Sprinkling Company produces two types of pipe:

(1) Lawn sprinkler pipe and

(2) Building sprinkler pipe. Relevant information for the production of the two types of pipe for 2012 is as follows:

These preliminary manufacturing overhead cost assignments do not yet reflect the proper application of Wade's ABC overhead application system. Wade allocates utilities and support staff costs on the basis of production volume, quality control costs on the basis of number of machine setups required, and purchasing department costs on the basis of number of purchase orders. During 2012, volume of these various activities per product line was:

Required:
1. Determine the cost per unit for each cost driver.
2. Determine the amount of manufacturing overhead to be assigned to the two types of sprinkler pipe.
3. Determine the total cost for each type of pipe produced for theyear.

Transcribed Image Text:

Lawn Sprinkler Pipe 300,000 Building Sprinkler Pipe 190,000 Feet produced Direct materials and direct labor costs Manufacturing overhead costs: Utilities Support staf Quality control Purchasing $260,000 $145,000 $ 55,000 S 90,000 75,000 7,500 5,000 9,000 25,000