Question

National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and...

National Inc. manufactures two models of CMD that can be used as cell phones, MPX, and digital camcorders.

Model Annual Sales
in Units
High F 10,200
Great P 16,200

National uses a volume-based costing system to apply factory overhead based on direct labor dollars. The unit prime costs of each product were as follows:

High F Great P
Direct materials $ 38.20 $ 25.60
Direct labor $ 17.80 $ 13.40
Budget factory overhead:
Engineering and Design 2,440 engineering hours $ 402,600
Quality Control 12,870 inspection hours 295,780
Machinery 33,750 machine hours 607,320
Miscellaneous Overhead 26,430 direct labor hours 158,520
Total $ 1,464,220

National's controller had been researching activity-based costing and decided to switch to it. A special study determined National's two products have the following budgeted activities:

High F Great P
Engineering and design hours 980 1,460
Quality control inspection hours 5,660 7,210
Machine hours 20,300 13,450
Labor hours 12,020 14,410

Using activity-based costing, total overhead per unit of the High F model is: (Rounded to the nearest cent.)

Multiple Choice

$165.00.

$45.37.

$65.38.

$71.49.

$49.22.

Homework Answers

Answer #1

The correct answer is $ 71.49

Note:

Activity Cost Activity Rate ( Cost / Activity) Activity High F Overhead ( Activity High F * Activity rate)
Engineering and Design 2,440 engineering hours $ 4,02,600 165.000000000000000 980 1,61,700.00000000000
Quality Control 12,870 inspection hours 2,95,780 22.982128982129000 5660 1,30,078.85003885000
Machinery 33,750 machine hours 6,07,320 17.994666666666700 20300 3,65,291.73333333300
Miscellaneous Overhead 26,430 direct labor hours 1,58,520 5.997729852440410 12020 72,092.71282633370
Total Total Overhead 7,29,163.29619851700
Total Units of High F 10200
overhead per unit of the High F model 71.48659767
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