Birds and Such, Inc. manufactures birdhouses and uses an activity-based costing
ID: 2336542 • Letter: B
Question
Birds and Such, Inc. manufactures birdhouses and uses an activity-based costing system. The following information is provided for the month of May: Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base Materials handling $ 3,500 Number of parts 5,000 parts Assembling $12,000 Number of parts 5,000 parts Packaging $5,750 Number of birdhouses 1,250 birdhouses Each breadbox consists of 4 parts, and the direct materials cost per birdhouse is $7.00. What is the cost of materials handling and assembling per breadbox?
Explanation / Answer
Activity allocation :
Cost of material handling and assembling per breakbox = (0.70+2.40)*4 = $12.40
Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base Activity rate Materials handling $3500 Number of parts 5000 parts 0.70 per part Assembling $12000 Number of parts 5000 parts 2.40 per part Packaging $5750 Number of birdhouses 1250 birdhouse 4.60 per birdhouseRelated Questions
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