Activity-Based Costing and Conventional Costs Compared Hickory Grill Company man

Question

Activity-Based Costing and Conventional Costs Compared Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month. Gas COoKkeP Charcoal Smoker Units Number of batches Number of batch moves Direct materials Direct labor 2,000 50 90 70,000 $44,000 8,000 20 50 130,000 $56,000 Manufacturing overhead follows: Activity Cost Cost Driver Materials acquisition and inspection$ 68,000 Amount of direct materials cost Materials movement 19,600 Numbers of batch moves Scheduling 43,400 Number of batches 131,000 Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent.

Explanation / Answer

overhead rate = 131,000/(100,000)

overhead rate = 131,000/(100,000)

1.31 1) total manufacturing cost Gas Charcoal Total Cooker Smoker Direct materials 70,000 130,000 200,000 Direct labor 44,000 56,000 100,000 overhead applied @4.31 57640 73360 131,000 total manufacturing cost 171,640 259,360 431,000 units produced 2,000 8,000 10,000 cost per unit 85.82 32.42 2) Activity Materials acqusition and inspection 68000/200,000= 0.34 materials movements 19,600/140= 140 Schdeuling 43,400/70= 620 total manufacturing cost Gas Charcoal Cooker Smoker Direct materials 70,000 130,000 200,000 Direct labor 44,000 56,000 100,000 overhead 0 materials Acqusition & inspection 23800 44200 68,000 Materials movements 12600 7000 19,600 scheduling 31000 12400 43,400 total manufacturing cost 181,400 249,600 431,000 units produced 2,000 8,000 cost per unit 90.7 31.2

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