Question

Larner 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	$	9.00	per direct labor-hour
Machine-related	$	7.00	per machine-hour
Machine setups	$	60.00	per setup
Production orders	$	200.00	per order
Shipments	$	100.00	per shipment
General factory	$	7.00	per direct labor-hour

  

Cost and activity data have been supplied for the following products:

  

	J78				B52
Direct materials cost per unit	$	3.00			$	36.00
Direct labor cost per unit	$	5.00			$	7.00
Number of units produced per year		4,000				200

	Total Expected Activity
		J78			B52
Direct labor-hours		800			40
Machine-hours		3,300			20
Machine setups		3			3
Production orders		8			3
Shipments		12			3

Required:

Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answers to 2 decimal places.)

Unit Product Cost: J78= B52=

Answer 1

Unit product cost of each product listed above is as shown below:

	J78	B52
Direct materials cost per unit	3	36
Direct labor cost per unit	5	7
Overhead cost per unit	9.72	9.30
Unit Product Cost	17.72	52.30

				Total Expected activity		Activity Costs
Activity Cost Pool	Activity Rates			J78	B52	J78	B52
Labor-related	$	9	per direct labor-hour	800	40	7200	360
Machine-related	$	7	per machine-hour	3,300	20	23100	140
Machine setups	$	60	per setup	3	3	180	180
Production orders	$	200	per order	8	3	1600	600
Shipments	$	100	per shipment	12	3	1200	300
General factory	$	7	per direct labor-hour	800	40	5600	280
Total overhead						38880	1860
Number of units produced per year						4,000	200
Overhead cost per unit						9.72	9.3