Nather Comp has two support depts, Maint Dept (MD) and Personnel Dept (PD), and two production depts,
Question:
Nather Comp has two support depts, Maint Dept (MD) and Personnel Dept (PD), and two production depts, A1 and A2. The MD cost driver is service hours and 2,200 hours were planned. The PD cost driver is headcount and 495 total employees was planned. The cost driver in the A1 and A2 is direct labor hours (DLH). Plan data is shown below. Direct materials is the only cost directly traced to products. Production order #000105 included $116.00 in direct material and 10 MH and 21 MH in Dept A and Dept B, respectively. Using the direct method, the cost of the order is closest
Directly traced cost:
MD $135,000
PD 20,000
A1 48,000
A2 67,500
Cost driver planned:
MD PD A1 A2
service hours -- 400 1,200 600
employees 20 35 260 180
DLH (000s) -- -- 20 30
A: $310.50
B: $280.00
C: $275.39
D: $295.45
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich