Keeley Company makes products C and D. Information for overhead costs and for th
ID: 2460958 • Letter: K
Question
Keeley Company makes products C and D. Information for overhead costs and for the two products appears below. The company makes 50,000 units of product C each year and 20,000 units of Product D.
Activity Driver Total Overhead Cost Prod C Usage Prod D usage Setups # of setups $200,000 500 setups 1,500 setups Ordering parts # of parts $300,000 60,000 parts 40,000 parts Machining MH $600,000 12,000 MH 6,000 MH Inspections # of Insp $400,000 10,000 Insp 40,000 Insp Shipping # of shipments $300,000 10,000 Ship 10,000 Ship Total overhead $1,800,000 * MH – Machine Hours Insp – Inspections Ship - Shipments How much overhead would be assigned to each unit of Product C? A. $860,000 per unit B. $100 per unit C. $47 per unit D. $17.20 per unit
Explanation / Answer
The correcgt option is $ 17.20 per unit of Product C
Costs Product C Product D Setup 50,000 150,000 Ordering parts 180,000 120,000 Machining 400,000 200,000 Inspection 80,000 320,000 Shipping 150,000 150,000 Total 860,000 940,000 Number of units produced 50,000 20,000 Overhead cost per unit $ 17.20 $ 47Related Questions
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