Ace Plastics produces different kinds of products, all in one manufacturing facility. They have identified four activities for their costing system:

Materials management?allocated by number of purchase orders

Chemical processing?allocated on metric tons

Molding?allocated on direct labor hours

Packaging?allocated by number of units produced

The activity rates are as follows:

Engineering design shows that the order will require direct material worth $540, direct labor cost being $90, require 4 purchase orders to be placed, use 2 metric tons of chemical bases, and need 8 direct labor hours. The size of the order is to produce 3,000 units of product. Calculate total cost of production of the order.

Transcribed Image Text:

Materials management $12.00 Chemical processing $7.50 Molding $24.00 Packaging $0.10 Per purchase order Per metric ton Per direct labor hour Per unit Materials management $12.00 Chemical processing $7.50 Molding $24.00 Packaging $0.10 Per purchase order Per metric ton Per direct labor hour Per unit

Answer rating: 100% (QA)

Calculation of total cost of the ... View the full answer