Baden-Mbel GmbH manufactures a variety of prestige boardroom chairs. Its job-costing system was designed using an activity-based

Baden-Möbel GmbH manufactures a variety of prestige boardroom chairs. Its job-costing system was designed using an activity-based approach. There are two direct-cost categories (direct materials and direct manufacturing labour) and three indirect-cost pools. These three cost pools represent three activity areas at the plant:

Required 1 Calculate the March 2022 total manufacturing costs and unit costs of the executive chair and the chairman chair.
2 Suppose that the upstream activities to manufacturing (R&D and design) and the downstream activities (marketing, distribution and customer service) were analysed. The unit costs in 2022 were budgeted to be as follows:

Calculate the full product costs per unit of each line of chairs. (Full product costs are the sum of the costs in all business function areas.)

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Manufacturing activity area Budgeted costs for 2022 Cost driver used as Cost-allocation allocation base rate Materials handling 200 000 Parts 0.25 Cutting 2 160 000 Parts 2.50 Assembly 2 000 000 Direct manufacturing labour-hours 25.00 Two styles of chairs were produced in March, the executive chair and the chairman chair. Their quantities, direct material costs and other data for March 2022 are as follows: Units produced Direct material costs Number of parts Direct manufacturing labour-hours Executive chair 5.000 600 000 100 000 7 500 Chairman chair 100 25 000 3 500 500 The direct manufacturing labour rate is 20 per hour. Assume no opening or closing stock.