4. Dobles Corporation has provided the following data from its activity-based co

Question

4. Dobles Corporation has provided the following data from its activity-based costing system Activity Cost PoolsEstimated Overhead Cost Expected Activity Assembly Processing orders Inspection S228,060 18.000 machine-hours12.6T S34,0681.200 orders 283 S125.560 1.720 inspection-hours13 The company makes 420 units of product D28K a year, requiring a total of 460 machine-hours 80 orders, and 10 inspection-hours per year. The product's direct materials cost is $48.96 per unit and its direct labor cost is $25.36 per unit. According to the activity-based costing system, the unit product cost of product D28K is closest to: A. $95.34 per unit B. S93.60 per unit C. $69.98 per unit D. S91.98 per unit E. $21.02 per unit

Explanation / Answer

a.$95.34.

first calculate the overhead per unit:

overhead per unit = $8,830 / 420

=>$21.02.per unit

Unit product cost = direct material + direct labour + overhead per unit

=>$48.96 + $25.36 + $21.02

=>$95.34.per unit.

assembly (460 * 12.67) $5,828.80 processing orders (80 * 28.39) $2,271.20 inspection (10*73) $730 total overhead $8,830

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