Question

Plaid Manufacturing Co. produces two products: G1 and M1. The company uses an activity based costing...

Plaid Manufacturing Co. produces two products: G1 and M1. The company uses an activity based costing system. The following are the activities, budgeted total cost and cost drivers per activity for the year 20x9:

Activity

Budgeted Cost

Cost Base

Cost Base Volume

Assembly

$878375

# of DL hours

35836

Inspection

$650181

# of units

22538

Shipping

$321938

# of batches

199


Budgeted data relating to the production of M1 for 20x9 is given below:

Number of units

1500

Units per batch

75

Direct labour hours (@ $18 per hour)

18001 hours

Direct materials (@ $13.12 per kg.)

888 kg.


What is the total cost of producing M1 in 20x9?

Select one:

a. $852518

b. $528500

c. $941496

d. $516850

Business   Accounting   
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Homework Answers

Answer #1

--Correct Answer = Option 'a' $ 852,518

Cost of producing M1
Direct Material $11,651
Direct Labor cost $324,018
Assembly cost $441,222
Inspection cost $43,272
Shipping Cost $32,356
Total cost of producing $852,518 ANSWER

--Workings

Cost of producing M1
Direct Material =888*13.12
Direct Labor cost =18001*18
Assembly cost =+(878375/35836)*18001
Inspection cost =+(650181/22538)*1500
Shipping Cost =+(321938/199)*20 batches
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