20. Petitte Corporation has provided the following data from its activity-based
ID: 2519267 • Letter: 2
Question
20. Petitte Corporation has provided the following data from its activity-based coting sysem Overhead Activities Cost Expected Activity Assembly Processing orders $612,560 31,000 machine-hours S35,451 1,300 orders Iespection$100,217 1,690 inspection-hours Data concerning the company's product KS4A appear below: Annual unit production and sales Annual machine-hours Annual namber of orders Annual inspection hors Direct materials cost Direet labor cost 410 700 30 30 $45.67 per unit $31.24 per unit According to the activity-based costing system, the unit product cost of product K34A is closest to: A. S112.64 per unit B. $114.99 per unit C. $116.98 per unit D. $76.91 per unit 21. Which of the following should NOT be included as part of manufacturing overbead at a company that makes office furniture? ?.sheet steel in a file cabinet made by the company. C. idle time for direct labor. D. taxes on a factory building.Explanation / Answer
To Calculate Product cost of K54A, according to Activity Based Costing, we will calculate
a. activity per unit
b. cost per activity
c. calculate cost per unit. (Using a & b)
Therefore the correct answer is C.
Calculation of Cost per unit as per Activity based cost Particulars Amount in $ A. Total unit produced of K54 A during the year 410 B. No of Machine hours used for K54A 700 C. Machine hour used for assembly per unit (B/A) 1.707 Hrs D. Cost per machine hour (refer table below) 19.76 E. Cost of Assembly per Unit (C*D) 33.73 F. No of Order placed for K54A 30 G. Order placed per unit (F/A) 0.073 H.Cost of order (refer table below) 27.27 I. Cost of order per unit (G*H) 1.99 J. No fo Inspection hours for K54 A 30 K. Inspection hours per unit (A/J) 0.073 L. Inspection cost per hour (refer table below) 59.30 M. Cost of inspection per unit (K*L) 4.33 N. Direct material cost per unit 45.67 O. Direct labour cost per unit 31.24 P. Therefore, total cost per unit (E+I+M+N+O+P) 116.98Related Questions
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