A company has identified the following overhead costs and cost drivers for the c

Question

A company has identified the following overhead costs and cost drivers for the coming year:

Budgeted direct labor cost was $125,600 and budgeted direct material cost was $347,680. The following information was collected on three jobs that were completed during the year:

If the company uses activity-based costing (ABC), what is the cost of each unit of Job 102? (Round your final answer to 2 decimal places.)

Answer choices:

$281.60.

$464.60.

$329.80.

$376.60.

         Budgeted   Overhead Item   Cost Driver Budgeted Cost    Activity Level   Machine setup   Number of setups $ 23,100           210           Inspection   Number of inspections 118,300         4,550           Material handling   Number of material moves 91,500         6,100           Engineering   Engineering hours 18,300         610        

Explanation / Answer

Activiy rates

Machine setup = $ 23,100 / 210 = $110, per setup

Inspection = $118,300 / 4,550 = $26 , per Inspection

Material handling = $91,500 / 6,100 = $15 per Material moves

Engineering = $18,300 / 610 = $30 per hours

Computation of Activity cost of Job 102

Cost per unit of Job 102 = $14,080 / 50 (number of units completed) = $281.60

Job 102 Amount Direct materials $9,750 Direct labor $2,200 Prime Cost $11,950 Add Overheads setups Cost ( 2 * $110) $220 Inspections (10 * $26) $260 Material moves (10* $15) $150 Engineering (50 * $30) $1,500 Total Cost $14,080

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