Question

1. A company manufactures two products, chairs and tables. Data regarding the two product is as follows:

                        Direct labor hours per unit       Annual production

Chairs                        .50 hours                           5,000 units

Tables                        .80 hours                            4,000 units

Chairs require $40.00 in direct materials per unit and tables require $50 per unit. The direct labor wage rate is $30 per hour. The activity-based costing system has the following activity cost pools:

Activity cost pool          Activity Measure       Estimated overhead cost          Activity

                                                                                                                 Chairs    Tables                   

Machine set ups         Number of set ups                  $150,000                 1,000     1,500

Special processing     Machine hours                        $100,000                    180        220

Compute the unit product cost for chairs rounded to the nearest cent

Answer 1