Question

Determine the unit cost for each job using ABC. Round cost per unit answers to two...

Determine the unit cost for each job using ABC. Round cost per unit answers to two decimal places when applicable.

Job 201 Job 202
Direct materials $Answer $Answer
Direct labor Answer Answer
Setup cost Answer Answer
Ordering costs Answer Answer
Maintenance costs Answer Answer
Power Answer Answer
Total job costs $Answer $Answer
Units produced Answer Answer
Cost per unit $Answer $Answer

Tigertown makes backpacks for large sporting goods chains that are sold under the customers' store brand names. The Accounting Department has identified the following overhead costs and cost drivers for next year:

Overhead Item Expected Costs Cost Driver Maximum Quantity
Setup costs $244,800 Number of setups 7,200
Ordering costs 65,000 Number of orders 65,000
Maintenance 460,000 Number of machine hours 80,000
Power 44,000 Number of kilowatt hours 440,000

Total predicted direct labor hours for next year is 26,000. The following data are for two recently completed jobs:

Job 201 Job 202
Cost of direct materials $8,000 $9,500
Cost of direct labor $16,100 $59,800
Number of units completed 800 650
Number of direct labor hours 220 270
Number of setups 15 19
Number of orders 21 42
Number of machine hours 460 360
Number of kilowatt hours 200 300

Homework Answers

Answer #1

Calculate activity rate

Overhead item expected cost cost driver maximum quantity activity rate
Setup cost 244800 Number of setups 7200 34 per setup
Ordering cost 65000 Number of orders 65000 1 per order
Maintenance cost 460000
Number of machine hours
80000 5.75 per machine hour
Power 44000 Number of kilowatt hours 4400000 0.10 per kilowatt hour

Determine the unit cost for each job using ABC. Round cost per unit answers to two decimal places when applicable.

Job 201 Job 202
Direct material 8000 9500
Direct labour 16100 59800
Setup cost 510 646
Ordering cost 21 42
Maintenance 2645 2070
Power 20 30
Total cost 27296 72088
Unit 800 650
Unit cost 34.12 110.90
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