Beartowne Enterprises uses an activity-based costing system to costs in its auto

Question

Beartowne Enterprises uses an activity-based costing system to costs in its auto-parts d Activity Materials Assembling Packaging Est. Indirect Activity Costs $58,000 $195,000 Allocation base Material moves Cost allocation rate $7.00/move $3.00/machine hour $4.5°finished unit $70,000Machine #Of finished units The following units were produced in December with the following information. The company incurs no direct labor costs Part # #Produced Materials costs #Moves Machine Hrs. Part 001 Part 002 1.150 4,500 3,750 $3,500 $5,000 $8,000 400 ,450 Part 003 2,400 Total manufacturing costs for Part 001 is OA. $3,600 OB. $7,100 O C. $8,775 O D. $12,.275

Explanation / Answer

Manufacturing cost generally does not include Packaging cost.

Hence, Total manufacturing cost for Part 001 = 2100 + 1500 = $3600

Answer is A.

Particulars Materials Assembling Packaging No. of activity 300 moves 500 hours 1150 units Rate per activity $7/move $3/machine hour $4.50/finished unit Cost $2100 $1500 $5175

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