The production manager of ABC Inc. provided the following budgeted information for 2011, given a budgeted...

 

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The production manager of ABC Inc. provided the following budgeted information for 2011, given a budgeted capacity of 1,000,000 direct labor hours: Overhead Cost Electric Power Work Cells Material Handling Quality Control Inspections Machine Setups Total Budget Overhead Cost Activity Drivers 200,000 kilowatt hours 500,000 3,000,000 300,000 square feet 1,000,000 200,000 material moves Cost per Door - Traditional Approach Cost per Door - Activity Based Amount 1,000,000 50,000 inspections 350,000 25,000 set-ups 5,850,000 The cost accountant prepared a cost estimate for producing the 2,500 doors: Direct Material Cost Direct Labor Cost Direct Labor Hours Electric power - kilowatt hours Work cells - square feet Number of material handling moves Number of quality control inspections Number of set-ups 50,000 150,000 2,500 500 1,000 20 15 6 Prime Cost 200,000 200,000 Overhead 2.50 10 5 20 14 5.85 POR 1,250 10,000 100 300 84 14,625 11,734 Total 214,625 211,734 Cost/Unit Determine the unit product cost of each of the company's two products under activity-based costing system. 85.85 84.69 1.16 The production manager of ABC Inc. provided the following budgeted information for 2011, given a budgeted capacity of 1,000,000 direct labor hours: Overhead Cost Electric Power Work Cells Material Handling Quality Control Inspections Machine Setups Total Budget Overhead Cost Activity Drivers 200,000 kilowatt hours 500,000 3,000,000 300,000 square feet 1,000,000 200,000 material moves Cost per Door - Traditional Approach Cost per Door - Activity Based Amount 1,000,000 50,000 inspections 350,000 25,000 set-ups 5,850,000 The cost accountant prepared a cost estimate for producing the 2,500 doors: Direct Material Cost Direct Labor Cost Direct Labor Hours Electric power - kilowatt hours Work cells - square feet Number of material handling moves Number of quality control inspections Number of set-ups 50,000 150,000 2,500 500 1,000 20 15 6 Prime Cost 200,000 200,000 Overhead 2.50 10 5 20 14 5.85 POR 1,250 10,000 100 300 84 14,625 11,734 Total 214,625 211,734 Cost/Unit Determine the unit product cost of each of the company's two products under activity-based costing system. 85.85 84.69 1.16

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