Activity-Based Costing Wingli Corporation manufactures a variety of office chair

Question

Activity-Based Costing Wingli Corporation manufactures a variety of office chairs. The costing system was designed using an activity-based approach. The company produced two styles of chairs in December. The production data are as follows: Units Number of Parts 500,000 17,500 Direct Materials Direct Labour Hours Style A Style B 25,000 500 37,500 2,500 S3,000,000 125,000 Three activities have been identified. Resource drivers are used to assign costs to each activity. The overhead activities, activity costs, and other related data are as follows: Budgeted Costs Cost Drivers Materials handling Cutting Assembly 1,000,000 Parts 0,800,000 Parts 10,000,000 Di Cost Allocation Rate 0.25 2.5 rect labour hours 25 There is no beginning or ending inventory. The direct labour rate is $30 per hour Required: 1. Calculate the December total manufacturing costs Manufacturing Costs Style A Style B Total 2. Calculate the unit costs for the style A and style B chairs. Round your answers to two decimal places Unit Costs Style A Style B

Explanation / Answer

total DM DL OH mfg cost Style A 3,000,000 1125000 2312500 6,437,500 Style B 125,000 75000 135625 335,625 A B total Materials handling 125000 4375 129375 cutting 1250000 43750 1293750 Assembly 937500 87500 1025000 total 2312500 135625 2448125 1) Mfg costs Style A 6,437,500 Style B 335,625 total 6,773,125 2) unit costs Style A 257.5 Style B 671.25

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