nect.html pter 7 Paparo Corporation has provided the following data from its act

ID: 2546310 • Letter: N

Question

nect.html pter 7 Paparo Corporation has provided the following data from its activity-based costing system: Activity Cost Pool Total Cost Total Activity 985,300 59,000 machine-hours Assembly 837 Processing orders $ 80,010 2,100 orders Inspection 106,057 1,390 inspection-hours Data concerning the company's product Q79Y appear below Annual unit production and sales Annual machine-hours Annual number of orders Annual inspection hours Direct materials cost Direct labor cost 300 1,090 95 35 $54.00 per unit $41.23 per unit According to the activity-based costing system, the average cost of product Q79Y is closest to: Multiple Choice K Prex 5 of 13E Next> PS F6 F7 FB

Explanation / Answer

Answer: Average cost of product Q79y = $176.87

Working notes for the above answer is as under

(a)

(b)

(a) ÷ (b)

Activity Cost Pool

Total Cost

Total Activity

Activity Rate

Assembly

$985,300

59,000 machine-hours

16.7

machine-hour

Processing Orders

80,010

2100 orders

$38.1 per order

Inspection

106,057

1,390 inspection-hours

$76.3 per inspection-hour

Average Cost of Product Q79Y:

Direct materials

$54.00

Direct labor

41.23

Assembly [($16.7 × 1,090) ÷ 300]

60.68

Processing orders [($38.1 × 95) ÷ 300]

12.07

Inspection [($76.3× 35) ÷ 300]

8.90

$176.87