Drilling Company uses activity-based costing and provides this information: Manufacturing Activity Materials handling Number of parts...
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Drilling Company uses activity-based costing and provides this information: Manufacturing Activity Materials handling Number of parts Driver Rate Machinery Assembly Inspection Cost Driver Number of machine hours Number of parts Number of finished units $ 0.30 56.00 3.10 35.00 Drilling has just completed 85 units of a component for a customer. Each unit required 105 parts and 3.25 machine hours. The prime cost is $1,350 per finished unit. All other manufacturing costs are classified as manufacturing overhead. Required: 1. Compute the total manufacturing costs and the unit costs of the 85 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $185 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $305 per unit. Compute the full product cost per unit, including upstream, manufacturing, and downstream activities. Also compute the relative proportion of each main cost category. Drilling Company uses activity-based costing and provides this information: Manufacturing Activity Materials handling Number of parts Driver Rate Machinery Assembly Inspection Cost Driver Number of machine hours Number of parts Number of finished units $ 0.30 56.00 3.10 35.00 Drilling has just completed 85 units of a component for a customer. Each unit required 105 parts and 3.25 machine hours. The prime cost is $1,350 per finished unit. All other manufacturing costs are classified as manufacturing overhead. Required: 1. Compute the total manufacturing costs and the unit costs of the 85 units just completed using ABC costing. 2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $185 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $305 per unit. Compute the full product cost per unit, including upstream, manufacturing, and downstream activities. Also compute the relative proportion of each main cost category.
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Related Book For
Cost Management A Strategic Emphasis
ISBN: 978-0078025532
6th edition
Authors: Edward Blocher, David Stout, Paul Juras, Gary Cokins
Posted Date:
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