Back Porch Company manufactures lawn chairs using an activity -based costing sys

Question

Back Porch Company manufactures lawn chairs using an activity -based costing system to allocate all manufacturing conversion costs The fellowing information is provided for the month of June Estimated Quantity of Activity Costs Allocation Base Allocation Base Activity Materials handing Assembling Packaging Number of parts Number of parts Namber of lawn chairs 18,000 parts 18,000 parts 1800 lawn chairs $11,000 16,100 4,700 Each lawn chair consists of 10 parts, the total direct materials cost per lawn chair is $11 What is the total cost of packaging per lawn chair? O A. $2.61 OB. S1361 . sa 94 | ick to select your a

Explanation / Answer

Answer is $2.61

Packaging:

Estimated Cost = $4,700
Estimated Activity = 1,800

Cost of Packaging per lawn chair = Estimated Cost / Estimated Activity
Cost of Packaging per lawn chair = $4,700 / 1,800
Cost of Packaging per lawn chair = $2.61

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