Hambie furniture is considering updating their costing system. The company’s cos
ID: 2558866 • Letter: H
Question
Hambie furniture is considering updating their costing system. The company’s cost accountant has identified three overhead pools along with appropriate drivers for each pool.
Activity pool costs Activity drivers
Utilities 520,000 80,000 machine hours
Scheduling and setup 651,000 700 setups
Material handling 2,080,000 2,600,000 pounds of material
The company manufactures three models of tables listed below along with plans for the current years production
oval round Square
Direct costs (material and labor) 80,000 80,000 80,000
Total machine hours 40,000 15,000 25,000
Total number of setups 90 310 300
Total pounds of material 812,500 650,000 1,137,500
Number of units products 5000 2000 7000
Number of units sold 4,500 2,000 5,800
Compute the total cost and the unit cost for each model?
Compute the cost of ending inventory to the year?
Explanation / Answer
Compute the total cost and the unit cost for each model
2) Cost of ending inventory = (500*214.74+1200*204.50) = 352770
Oval Round Square Direct material and labour 80000 80000 80000 Utilities 260000 97500 162500 Scheduling and setup 83700 288300 279000 Material handling 650000 520000 910000 Total cost 1073700 985800 1431500 Production units 5000 2000 7000 Unit cost 214.74 492.90 204.50Related Questions
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