Spendlove Corporation has provided the following data from its activity-based co

Question

Spendlove Corporation has provided the following data from its activity-based costing system: The company makes 990 units of product S78N a year, requiring a total of 1.610 machine-hours. 65 orders, and 30 inspection-hours per year The product's direct materials cost is $52.35 per unit and its direct labor cost is $17.21 per unit. The product sells for $115.45 per unit. According to the activity-based costing system, the product margin for product S78N is: (Round your intermediate calculations to 2 decimal places.) $13,659.15 $45,431.10 $13,279.60 $11,373.15

Explanation / Answer

Calculation of overhead charges:

Per unit cost of Assembly is 1150100 / 62000 = 18.55

Order cost is 54553.80 / 1860= 29.33

Inspection cost is 194310 / 2550 = 76.2

Order S78N of 990 units requires

1610 Assembly units = 1610 * 18.55 =      29865.5

65 orders             = 65* 29.33 = 19064.5

30 inspection = 30 * 76.2 = 4982.65

Direct materials 990 * 52.35 = 51826.5

Direct labour 990*17.21 = 17037.9

Total cost = 122777.05

Sales price 115* 990 = 113850

Profit margin is 88927.05

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.