OP Technologies Manufacturing manufactures small parts and uses
an activity-based costing system.
|Est. Indirect Activity
|Cost allocation rate
|Assembling||$259,000||Direct labor hours||$11.00/dir. labor hour|
|Packaging||$100,000||# of finished units||$3.00/finished unit|
The following parts were produced in October with the following
|Part||# Produced||Materials Costs||# Moves||Dir. Labor Hrs.|
Total unit cost for part B is closest to (rounded to two decimal places)
|Activity||Activity rate||Activity used||Cost allocated|
|Material||$4/move||1,700||1,700 x 4 = 6,800|
|Assembling||$11/direct labor hour||225||11 x 225 = 2,475|
|Packaging||$3/Finished unit||2,000||3 x 2,000 = 6,000|
Total cost of B = Total cost + Material costs
= 15,275 + 8,500
Total unit cost for part B = Total cost/Number of units produced
=$11.89 per unit
First option is the correct option
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