Baird Manufacturing produces two keyboards, one for laptop computers and the oth

Question

Baird Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The company has identified five major activities involved in producing the keyboards.

Activity measures for the two kinds of keyboards follow:

Required

Compute the cost per unit of laptop and desktop keyboards, assuming that Baird made 370 units of each type of keyboard. (Round your answers to 2 decimal places.)

Activity Allocation Base Allocation Rate Materials receiving & handling Cost of material 2 % of material cost Production setup Number of setups $ 119.00 per setup Assembly Number of parts $ 3.00 per part Quality inspection Inspection time $ 1.40 per minute Packing and shipping Number of orders $ 10.00 per order

Explanation / Answer

Laptop Desktop Material Cost            5,700.00          7,900.00 Labor Cost            1,220.00          1,110.00 Material Receiving and handling- 2% of material cost                114.00             158.00 Production Set up cost 31*119            3,689.00 10*119          1,190.00 Assembly Cost 44*3                132.00 24*3                72.00 Quality inspection 7200*1.4    10,080.00 4900*1.4    6,860.00 Packaging and shipping 66*10          660.00 16*10       160.00 Total Cost          21,595.00       17,450.00 Total Keyboard                370.00             370.00 Cost per keyboard                  58.36                47.16

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