(20 pts) A company makes two cell phones, the SLIM and the RAZ. Assume that ther
ID: 2574367 • Letter: #
Question
(20 pts) A company makes two cell phones, the SLIM and the RAZ. Assume that there are three activities that determine indirect costs and have the following cost drivers: 4. Cost Driver Activity Materials handling Direct-material cost Engineering Power Engineering change notices Kilowatt-hours The cost driver activity for a recent month is as follows: SLIMRAZ Direct material cost $25,000 $50,000 Kilowatt-hours 4 50,000 150,000 Engineering change notices 2 Indirect production costs for the month were: Materials handling $9,000 Engineering Power TOTAL 14,000 16,000 $39,000 the indicect preduction cost allocated to each product with the ABC systemExplanation / Answer
Answer:-
Working note:-
Activity Rate = Indirect production Cost $ / Cost driver
Calculation of Indirect Production cost to each product using ABC method Particulars SLIM RAZ Amount $ Amount $ Material Handling $25000*$.12 = 3000 $50000*$.12 = 6000 Engineering $2000*2 =4000 $2000*5 = 10000 Power 50000*.$08 = 4000 150000*.$08 = 12000 Total Indirect cost 11000 28000Related Questions
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