Electronics Unlimited uses activity-based costing to allocate all manufacturing

Question

Electronics Unlimited uses activity-based costing to allocate all manufacturing conversion costs. Electronics Unlimited produces computer keyboards; each computer keyboard has $8.00 of direct materials, includes 12 parts and requires 1/2 hour of machine time. Additional information follows:

Activity Allocation Base Cost Allocation Rate

Materials handling Number of parts $ .25 per part

Machining Machine hours $12.00 per machine hour

Assembling Number of parts $1.00 per part

Packaging Number of finished units $1.75 per finished unit

What is the cost of materials handling per computer keyboard?
A) $6.00
B) $15.00
C) $12.00
D) $0.88

Explanation / Answer

c

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