Viren Corporation has provided the following data from its activity-based costin
ID: 2386069 • Letter: V
Question
Viren Corporation has provided the following data from its activity-based costing system:Activity Cost Pool Total Cost Total Activity
Assembly $387,000 25,000 machine-hours
Processing orders $68,510 1,700 orders
Inspection $129,117 1,930 inspection-hours
The company makes 240 units of product T91H a year, requiring a total of 550 machine hours, 90 orders, and 40 inspection hours per year. The product's direct materials cost is $16.98 per unit, and its direct labor cost is $12.09 per unit. According to the activity-based costing system, the average cost of product T91H is closest to _______ per unit.
A. $75.70
B. $79.66
C. $90.81
D. $29.07
-->THE ANSWER IS ***NOT*** $75.70. Already tried that!
Explanation / Answer
13. Viren Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity
Assembly $387,000 25,000 machine-hours
Processing orders $68,510 1,700 orders
Inspection $129,117 1,930 inspection-hours
The company makes 240 units of product T91H a year, requiring a total of 550 machine hours, 90 orders, and 40 inspection hours per year. The product's direct materials cost is $16.98 per unit, and its direct labor cost is $12.09 per unit. According to the activity-based costing system, the average cost of product T91H is closest to _______ per unit.
answer : C. $90.81
Activity cost poll
Total cost
Total activity
Activity rate
assembly
387,000
25,000 machine hours
15.48 per machine hour
processing orders
68,510
1700 orders
40.30 per order
Inspection
129,117
1930 inspections
66.90 per inspection hour
Direct material
16.98
Direct labor
12.09
Assembly (15.48 x 550 ) / 240
35.48
processing orders (40 .30 x 9 0 ) / 240
15.11
Inspection (66.90 x 4 0 ) / 240
11.15
90.81
Activity cost poll
Total cost
Total activity
Activity rate
assembly
387,000
25,000 machine hours
15.48 per machine hour
processing orders
68,510
1700 orders
40.30 per order
Inspection
129,117
1930 inspections
66.90 per inspection hour
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