[The following information applies to the questions displayed below. MedTech, In

Question

[The following information applies to the questions displayed below. MedTech, Inc., manufactures and sells diagnostic equipment used in the medical profession. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning four manufacturing overhead cost drivers (activities). Assume that the direct labor rate $26 per hour and that there were no beginning inventories. The following information was available for 2016, based on an expected production level of 400,000 units for the year: Budgeted Costs for Cost Driver Used as Allocation Base Activity Cost Driver 2016 Cost Allocation Rate Materials handling Milling and grinding Assembly and inspection Testing $3,600,000 Number of parts used $1.50 per part 8,100,000 Number of machine hours 5,100,000 Direct labor hours worked 1,100,000 Number of units tested 10.50 per hour 4.25 per hour 2.75 per unit The following production, costs, and activities occurred during the month of August: Units Produced/Tested 56,000 Direct Materials Costs $3,400,000 Number of Parts Used 275,000 Machine Hours 96,000 Direct Labor Hours 170,000 value: 10.00 points Required information Required a. Calculate the total manufacturing costs and the cost per unit produced and tested during the month of August for MedTech, Inc. (Round "Cost per unit" to 2 decimal places.) Total manufacturing cost Cost per unit produced and tested

Explanation / Answer

Ans. Total manufacturing cost 10117000 Cost per unit produced and tested 180.66 Direct materials 3400000 Direct labor 4420000 Manufacturing Overhead: Materials handling 412500 Milling and grinding 1008000 Assembly and inspection 722500 Testing 154000 Total manufacturing cost 10117000 *Calculation of manufacturing costs: Direct materials Given Direct labor (170000 * 26) Materials handling (275000 * 1.50) Milling and grinding (96000 * 10.50) Assembly and inspection (170000 * 4.25) Testing (56000 * 2.75) *Cost per unit produced and tested    =    Total manufacturing cost / Number of units produced and tested 10117000 / 56000 180.66

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