Question

Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget...

Everlast Co. manufactures a variety of drill bits. The company's plant is partially automated. The budget for the year includes $432,000 payroll for 4,800 direct labor-hours. Listed below is cost driver information used in the product-costing system:

Overhead Cost Pool

Budgeted Overhead

Cost Driver

Estimated Cost Driver Level

Machine setups

$120,000

# of setups

120 setups

Materials handling

104,400

# of barrels

8,700 barrels

Quality control

264,000

# of inspections

1,100 inspections

Other overhead cost

144,000

# of machine hours

12,000 machine hours

Total overhead

$632,400


A current product order has the following requirements:

Machine setups

8 setups

Materials handling

606 barrels

Quality inspections

80 inspections

Machine hours

830 machine hours

Direct labor hour

336 hours

Compute the unit manufacturing cost and the total manufacturing costs of the order. Show calculations.

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