A. Calculate the cost per unit of activity for each activitycost pool for Merlot

Question

A. Calculate the cost per unit of activity for each activitycost pool for Merlot Company

B. Calculate the maufacturing overhead cost per metal casement manufactured during the period

Cost pools Setup Material handling Machine operation Packing. . . andling . . . . S 56,000 12,800 . . 60,000 . . .. Packing . Total indirect manufacturing costs... Cost drivers Setups.. Setups. . . aterial moves Machine hours 400 800 16,000 1,000 . One product made by Merlot, metal casements, used the following activities during the period to produce 500 units: Setups.... Setups 20 80 1,900 150 Machine hours.. .. Packing orders

Explanation / Answer

B)

Activity Cost cost per activity driver set up 56000/400 $140 per set up material moves 12800/800 $ 16 per material move machine hours 240000/16000 $ 15 per machine hour packing orders 60000/1000 $ 60 per order

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