Lerner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following
Question:
Lerner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates:
| Activity Cost Pool | Activity Rates | ||
| Labor-related | $ | 7.00 | per direct labor-hour |
| Machine-related | $ | 4.00 | per machine-hour |
| Machine setups | $ | 50.00 | per setup |
| Production orders | $ | 100.00 | per order |
| Shipments | $ | 150.00 | per shipment |
| General factory | $ | 4.00 | per direct labor-hour |
| | |||
Cost and activity data have been supplied for the following products:
| | J78 | B52 | ||
| Direct materials cost per unit | $ | 3.00 | $ | 20.00 |
| Direct labor cost per unit | $ | 3.00 | $ | 6.00 |
| Number of units produced per year | | 2,000 | | 100 |
| | Total Expected Activity | ||
| | |||
| | J78 | | B52 |
| Direct labor-hours | 1,000 | | 20 |
| Machine-hours | 2,000 | | 50 |
| Machine setups | 6 | | 3 |
| Production orders | 5 | | 3 |
| Shipments | 8 | | 3 |
| | |||
Required:
Compute the unit product cost of each product listed above.
Expert Answer:
Accounting Tools for business decision making
ISBN: 978-0470095461
4th Edition
Authors: kimmel, weygandt, kieso
