Question
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses...
Barnett Products manufactures three types of remote-control
devices: Economy, Standard, and Deluxe. The company, which uses
activity-based costing, has identified five activities (and related
cost drivers). Each activity, its budgeted cost, and related cost
driver is identified below.
| Activity | Cost | Cost Driver | ||
| Material handling | $ | 310,000 | Number of parts | |
| Material insertion | 3,720,000 | Number of parts | ||
| Automated machinery | 1,207,200 | Machine hours | ||
| Finishing | 176,800 | Direct labor hours | ||
| Packaging | 176,800 | Orders shipped | ||
| Total | $ | 5,590,800 | ||
The following information pertains to the three product lines for
next year:
| Economy | Standard | Deluxe | |||||||||
| Units to be produced | 11,700 | 6,700 | 3,700 | ||||||||
| Orders to be shipped | 1,170 | 670 | 370 | ||||||||
| Number of parts per unit | 10 | 15 | 25 | ||||||||
| Machine hours per unit | 1 | 3 | 5 | ||||||||
| Labor hours per unit | 2 | 2 | 2 | ||||||||
Under Barnett’s activity-based costing system, what is the per-unit
overhead cost of Standard?
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Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses...
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