Question

Ravelo Corporation has provided the following data from its activity-based costing system:

Activity Cost Pools	Estimated Overhead Cost		Expected Activity
Assembly	$	505,520	47,500	machine-hours
Processing orders	$	57,763	1,450	orders
Inspection	$	81,089	1,460	inspection-hours

Data concerning the company's product L19B appear below:

Annual unit production and sales		500
Annual machine-hours		1,060
Annual number of orders		140
Annual inspection hours		90
Direct materials cost	$	44.74	per unit
Direct labor cost	$	17.45	per unit

According to the activity-based costing system, the unit product cost of product L19B is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

• $105.90 per unit

• $67.93 per unit

• $102.65 per unit

• $62.19 per unit

Answer 1

Calculation:

Allocation of overhead and computation of overhead cost per unit
Activity	Estimated Overhead Cost	Activity Base	Usage of Activity Base	Activity Rate	L19B
Usage	Allocated Costs
Assembly	$505,520	Machine hours	47,500	$10.64	1,060	$11,281
Processing orders	$57,563	Orders	1,450	$39.70	140	$5,558
Inspection	$81,089	Inspection hours	1,460	$55.54	90	$4,999
Total	$644,172					$21,838
Nos of units						550
Overhead cost per unit						$43.68

Computation of unit cost of each product - Activity Based costing
Particulars	L19B
Direct material	$44.74
Direct labor	$17.45
Manufacturing overhead	$43.68
Unit Product Cost	$105.87