Question

Lightning makes premium bikes using two departments, assembly, and painting. Assembly estimates using 819,000 machine hours...

Lightning makes premium bikes using two departments, assembly, and painting.

Assembly estimates using 819,000 machine hours and painting uses 46,000 machine hours. Fixed manufacturing overhead costs are estimated to be $10,000,000 for assembly and $754,000 for painting. Variable manufacturing overhead per machine hour is $11.50 in both departments. Machine hours are used as the allocation base for a plantwide PDOR.

A bike dealership shop places an order for 20 bikes. The order requires 1,065 machine hours in assembly and 167 machine hours in painting. The job also requires $54,000 of direct materials and $108,000 of direct labor.

What is the unit product cost (per bike) for the job when Lightning uses a plantwide approach to calculating its PDOR?

Round your answer to 2 d.p. Do not round intermediary calculations

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