This Question: 1 pt 38 of 40 (17 complete) This Test: 40 pts possibl Tranquility

Question

This Question: 1 pt 38 of 40 (17 complete) This Test: 40 pts possibl Tranquility Company manufactures ceiling fans and uses an activity- based costing system. Each ceiling fan has 20 separate parts. The direct materials cost is $90 and each ceiling fan requires 3 hours of machine time to manufacture. There is no direct labor. Additional information is as follows Predetermined Overhead Allocation Rate $0.07 6.6 0.25 3.7 Activity Allocation Base Materials handling Number of parts Machining Assembling Packaging Machine hours Number of parts Number of finished units What is the total manufacturing cost per ceiling fan? (Round any intermediate calculations and your final answer to the nearest cent O A. $116.20 O B. $119.90 OC. $111.20 O D. $100.10

Explanation / Answer

The correct answer is Option 'B' $ 119.90

Direct Material cost $                                     90.00 Material handling cost [20 parts x $0.07] $                                        1.40 Machining Cost [3 hours x $ 6.6] $                                     19.80 Assembling cost [20 parts x $ 0.25] $                                        5.00 Packaging cost [1 fan = $ 3.7] $                                        3.70 Total Manufacturing cost $                                   119.90

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