asy Exercise Company manufactures treadmills using an activity-based costing sys
ID: 2459710 • Letter: A
Question
asy Exercise Company manufactures treadmills using an activity-based costing system. The ollowing information is available for the month of May: Total Budgeted Cost Estimated Quantity of Allocation Base Allocation Base Number of parts Machine hours Number of parts Number of finished units Activity Materials handling $9064 14,880 11,648 4150 Machining Assembling Packaging 6,400 parts 1,200 hours 6,400 parts 200 units ach treadmill consists of 32 parts and requires 6 hours of machine time to produce. The direct atorials cost per treadmill is $245.00. octcn rae ogreach of the our ompute the cost allocation rate for each of the four activities. Compute the average manufacturing cost of each treadmill.Explanation / Answer
Statement showing computations Activity Amount(a) Activity(b) Cost per Activityc= a/b Materials Handling 9,064.00 6,400.00 1.4163 Machining 14,880.00 1,200.00 12.4000 Assembling 11,648.00 6,400.00 1.8200 Packaging 4,150.00 200.00 20.7500 39,742.00 Statement showing computations Particulars Amount Materials Costs = 245*200 49,000.00 Materials Handling = 32*1.4163*200 9,064.00 Machining = 200*6*12.40 14,880.00 Assembling = 200*32 *1.82 11,648.00 Packaging = 200*20.75 4,150.00 Total cost of 200 Units 88,742.00 Costs per unit = 88,742/200 443.71 Statement showing computations Particulars Amount Indirect costs 220,000.00 DL hours 28,000.00 Indirect cost per DL hour = 220,000/28,000 7.86 Direct Labour Costs= 20*70 1,400.00 Indirect Labour Costs = 20*7.86 157.14 Total job Costs 1,557.14
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