Problem 4-19 ABC The following cost information is available for the Stuart and

Question

Problem 4-19 ABC The following cost information is available for the Stuart and Hahn Corporation Direct material $14 per unit for deluxe pillows $10 per unit for regular pillows $20 per hour (including benefits) Direct labor Overhead Activity Purchasing Allocation Base Number of purchase orders Number of shipments received Number of setups Number of inspections Cost $150,000 50,000 250,000 125,000 Machine setups Quality control During the year, 30,000 purchase orders were issued; 20,000 shipments were received; machine setups numbered 2,500; and 25,000 inspections were conducted A customer has contacted the company requesting comparative bids for an order or 100 deluxe pillows and 100 regular pillows, The company adds a 20 percent markup on deluxe pillows and 15 percent on regular pillows for its profits. The company's records indicate that the following activities would be required to complete an order of 100 deluxe and regular pillows: Regular Deluxe 10 Direct labor hours Purchase orders Shipments received Setups Inspections 10 10 Required Compute the bids for deluxe and regular pillows on a total-order basis. When required, round answers to the nearest cent. Regular 1,742. Deluxe 2,496. Hide Feedback Partially Correct

Explanation / Answer

Regular Direct Material 10*100 1000 Direct Labor $20*7 140 Purchasing 150000/30000*7 35 Receiving 50000/20000*10 25 Machine Setup 250000/2500*3 300 Quality Control 125000/25000*3 15 Total Cost 1915 Add Mark Up 15% 287.25 Biding Price 2,202.25 Deluxe Direct Material 1400 Direct Labor $20*10 200 Purchasing 150000/30000*7 35 Receiving 50000/20000*10 25 Machine Setup 250000/2500*4 400 Quality Control 125000/25000*4 20 Total Cost 2080 Add Mark Up 20% 416 Biding Price 2496

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