Question

# Dobles Corporation has provided the following data from its activity-based costing system: Activities Estimated Overhead Cost...

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

 Activities Estimated Overhead Cost Expected Activity Assembly \$963,460 67,000 machine-hours Processing orders \$91,485 1,900 orders Inspection \$130,944 1,860 inspection-hours

 The company makes 440 units of product D28K a year, requiring a total of 700 machine-hours, 41 orders, and 11 inspection-hours per year. The product's direct materials cost is \$35.86 per unit and its direct labor cost is \$29.60 per unit. According to the activity-based costing system, the unit product cost of product D28K is closest to:

\$94.58 per unit

\$84.78 per unit

\$65.46 per unit

\$92.96 per unit

 Cost per unit for D28K Answer: 94.58 per unit Rate Units Amount Direct Material 35.86 440 15,778 Direct Labor 29.6 440 13,024 Overheads Refer below for calculation 12,815 Cost for producing 440 units (A) 41,617 Cost for producing 1 unit [(A)/440 units] 94.58 Overhead Costs for D28K Activity Hours/orders Rate calculated below Total Assembly Hours 700 \$                             14.38 \$                                       10,066 Processing orders 41 \$                             48.15 \$                                          1,974 Inspection Hours 11 \$                             70.40 \$                                             774 Total overheads 12,815 Activities Estimated Overhead costs (a) Expected Activity (b) Amount per activity (a)/(b) Unit Assembly \$                                          963,460 67000 \$                                          14.38 Per Hour Processing orders \$                                            91,485 1900 \$                                          48.15 Per Order Inspection \$                                          130,944 1860 \$                                          70.40 Per Hour