t2g558 Wed 2:13 PM aE false Figure 7-7 mstrong Company preduces a variety of bic

Question

t2g558 Wed 2:13 PM aE false Figure 7-7 mstrong Company preduces a variety of bicycles One of it of the year, the folowing data were prepared for this plant plants produces two bicydles: a mountain model and a racing model. At the beginning 250,000 2 Quantity Selling Price Unit Prime Cost In addition, the tollowing information was previded so that overhead costs could be assigned to each product Activity Name Activity Driver 125,000 $1,000 500 $1,200 $400 Activity Cost Racing Mountain 250,000 250,000 50,000 $8,000,000 75,000 Problem 7-6 Refer to Figure 7-7, Armstrong Company uses activity-based coating to calculate Required If required, round your answers to the nearest A. Calculate the per unit product cost tor a mountain bike product costs MacBook Air

Explanation / Answer

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Machining MH 20,000,000 500,000 40 Engineering Eng. Hours 8,000,000 125,000 64 packing Orders 3,500,000 175,000 20 Activity Cost Allocated MOUNTAIN RACING Activity Rate Activity OH Activity OH machining 40 250000 10000000 250000 10000000 Engineering 64 75000 4800000 50000 4800000 Packing 20 50000 1000000 125000 1000000 Total Activity cost 15,800,000 15,800,000 Divide: Number of units 250000 125000 Activity cost per unit 63.2 126.4 Req A: Units Product cost of Mountain Bike: Prime cost per unit 400 Add: Activity Cost per unit 63.2 Unit product Cost 463.2 Req B: Unit product Cost of Racing Bike: Prime cost per unit 500 Add: Activity Cost per unit 126.4 Unit product Cost 626.4 Req C: Unit cost markup Profit Selling price Mountain 463.2 40% 185.28 648.48 racing 626.4 35% 219.24 845.64 Selling pricec Mountain 648.48 Racing 845.64

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