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Goodwin Co. manufactures two products: R and W. The company uses activity-based costing to apply manufacturing...

Goodwin Co. manufactures two products: R and W. The company uses activity-based costing to apply manufacturing overhead costs to products. The cost pools and related estimated overhead costs for 20x3 are as follows:

Activity Cost Pool

Activity measure

Overhead cost

Assembly

Number of direct labour hours

$35194

Inspection

Number of inspections

159307

Product support

# of engineers

252107


The expected activity measures for the manufacturing of product R in 20x3 are: 141 direct labour hours, 4901 inspections, and 2 engineer(s). The expected activity measures for the manufacturing of product W in 20x3 are: 520 direct labour hours, 7295 inspections, and 3 engineers.

If the company estimates that it will produce 11849 units of product R in 20x3, what is the manufacturing overhead per unit that would be applied to product R for the year?

Select one:

a. $14.55

b. $23.14

c. $8.04

d. $37.69

Business   Accounting   
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Homework Answers

Answer #1

Correct option is "A" - 14.55

Activity Total budgeted cost / Total activity = Activity rate overhead cost allocated to product R (# of Activity *activity rate)
Assemby 35194 141+520=661 53.24357 per DLH 141*53.24357=7507.34
Inspection 159307 4901+7295=12196 13.06223 PER INSPECTION 13.06223*4901=64017.99
Product support 252107 2+3=5 50421.4 per engineer 50421.4*2=100842.8
Total overhead allocated to product R 172368.13
Number of units 11849
manufacturing overhead rate per unit 172368.13/11849 =$ 14.55
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