Detroit Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and
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Question:
Detroit Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:
| Activity Cost Pool | Activity Cost | Activity Cost Driver | |
|---|---|---|---|
| Machine setup | $ 660,000 | 12,000 | setup hours |
| Material handling | 100,000 | 2,000 | tons of materials |
| Machine operation | 450,000 | 10,000 | machine hours |
The following data are for the production of single batches of two products, C23 Cams and U2 Shafts:
| C23 Cams | U2 Shafts | |
|---|---|---|
| Units produced | 500 | 300 |
| Machine hours | 4 | 5 |
| Direct labor hours | 200 | 400 |
| Direct labor cost | $ 5,000 | $ 10,000 |
| Direct materials cost | $ 30,000 | $ 20,000 |
| Tons of materials | 12.5 | 8 |
| Setup hours | 3 | 7 |
Determine the unit costs of C23 Cams and U2 Shafts using ABC.
Expert Answer:
Calculation Of Cost Driver Rates Calculation Rate Machine Setup 66000012000 ... View the full answer
Related Book For 
Financial reporting, financial statement analysis and valuation a strategic perspective
ISBN: 978-0324789416
7th Edition
Authors: James M Wahlen, Stephen P Baginskl, Mark T Bradshaw
Posted Date:
