Gerald Boards produces two kinds of skate boards. Selected unit data for the two

Question

Gerald Boards produces two kinds of skate boards. Selected unit data for the two boards for the last quarter follow.

Gerald allocates production overhead using activiy based costing. It allocates delievery expense and sales commissions, which amount to $57,500 per quarter, to the two products equally.

A. Compute the per-unit cost for each product. (Round to 2 decimal places).

I cannot figured out the correct answer. I added the production costs together for each and it states that is not the correct answer. I am at a loss for what else I should do, please help!

Basco Boards Shimano Boards Production Costs Direct Materials $24.70 $37.40 Direct Labor $30.70 $52.40 Allocated Overhead $15.35 $19.40 Total Units produced and Sold 4,700 8,700 Total Sales Revenue $411,250 $1,104,900

Explanation / Answer

**Delievery expense

equal allocation = 57500/2 = 28750 to each product

Per unit cost to basco :28750/4700= 6.12

shimano :28750/8700=3.30

Basco boards shimano boards Direct material 24.7 37.4 Direct labor 30.7 52.4 Allocated overhead 15.35 19.4 Delievery expense and sales commission 6.12 3.3 unit cost 76.87 112.5

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