Question

# OP Technologies Manufacturing manufactures small parts and uses an activity-based costing system. Activity ​ Est. Indirect...

OP Technologies Manufacturing manufactures small parts and uses an activity-based costing system.

 Activity ​ Est. Indirect Activity Costs Allocation base ​ Cost allocation rate ​ Materials \$78,000 Material moves \$4.00/move 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 information:

 Part # Produced Materials Costs # Moves Dir. Labor Hrs. A 2450 \$3400 1000 150 B 2000 \$8500 1700 225 C 4750 \$10,000 2400 1800

Total unit cost for part B is closest to (rounded to two decimal places)

 \$11.89 \$7.64 \$7.65 \$6.69

 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 \$15,275

Total cost of B = Total cost + Material costs

= 15,275 + 8,500

= \$23,775

Total unit cost for part B = Total cost/Number of units produced

= 23,775/2,000

=\$11.89 per unit

First option is the correct option

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