Jennings Company manufactures ceiling fans and uses an activity-based costing sy

Question

Jennings Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $85 and each ceiling fan requires 2.50 hours of machine time to manufacture. Additional information is as follows: Predetermined Overhead Allocation Rate Activity Materials handling Machining Assembling Packagin!g Allocation Base Number of parts Machine hours Number of parts Number of finished units $0.04 7.60 0.40 3.90 What is the total manufacturing cost per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent. O A. $97.70 O B. $116.70 O C. $112.80 O D. $104.80

Explanation / Answer

B. $116.70

Direct materials $85.00 Materials handling cost per unit ($0.04 × 20) $0.80 Machining cost per unit ($7.60 × $2.50) $19.00 Cost of assembling per fan ($0.40 × 20) $8.00 Packaging $3.90 Total manufacturing cost per ceiling fan $116.70

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