Case 24.1 Brannon Company manufactures ceiling fans and uses an activity-based c

Question

Case 24.1 Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information follows: Activity Materials handling Machining Assembling Packaging Allocation Base Number of parts Machine hours Number of parts Number of finished units Cost Allocation Rate $.08 7.20 35 2.70 1) Refer to Case 24.1. What is the cost of materials handling per ceiling fan? 2) Refer to Case 24.1. What is the cost of machining per ceiling fan? 3) Refer to Case 24.1. What is the cost of assembling per ceiling fan? 4) Refer to Case 24.1. What is the number of finished ceiling fans? 5) Refer to Case 24.1. What is the total manufacturing cost per ceiling fan?

Explanation / Answer

1 Cost of materials handling per ceiling fan = 20*0.08= 1.6 2 Cost of machining per ceiling fan = 2.5*7.2= 18 3 Cost of assembling per ceiling fan = 20*0.35= 7 4 Cannot be determined from the information given 5 Total manufacturing cost per ceiling fan = 95+1.6+18+7+2.7= 124.3

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