Question

Beaver Company manufactures coffee tables and uses an

activity−based

costing system to allocate all manufacturing conversion costs. Each coffee table consists of

20

separate parts totaling

$220

in direct​ materials, and requires

5

hours of machine time to produce. The company incurs no direct labor costs. Additional information​ follows:

Activity	Allocation Base	Cost Allocation Rate
Materials handling	Number of parts	$3.00 per part
Machining	Machine hours	$4.10 per machine hour
Assembling	Number of parts	$1.00 per part
Packaging	Number of finished units	$4.00 per finished unit

What is the total manufacturing cost per coffee​ table?

A.

$104.50

B.

$320.50

C.

$324.50

D. $82.00

Answer 1

Answer: [Option - C] i.e. {$324.50}

DETERMINE THE MANUFACTURING COST PER UNIT
PARTICULARS	ABC RATE	Coffe Table
Direct Material Costs		$220
Direct Labour Costs		-
Overhead Costs:
Material Handling Costs [No. of Parts]	$3.00	$60.00
		[20 x $3.00]
Machining Costs [No. of Machine Hours]	$4.10	$20.50
		[5 x $4.10]
Assembling Costs                    [No. of Parts]	$1.00	$20.00
		[20 x $1.00]
Packaging Costs [No. of Finished Units]	$4.00	$4.00
		[1 x $4.00]
Total Manufacturing Cost per Coffee Table		$324.50