Question

larner corporation is a diversified manufacturer of industrial goods. the company's activity-based ... Question: Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-base... (13 bookmarks) Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following six activity cost pools and activity rates: Activity Cost Pool Activity Rates Labor-related $ 7.00 per direct labor-hour Machine-related $ 3.00 per machine-hour Machine setups $ 40.00 per setup Production orders $ 160.00 per order Shipments $ 120.00 per shipment General factory $ 4.00 per direct labor-hour Cost and activity data have been supplied for the following products: J78 B52 Direct materials cost per unit $ 6.50 $ 31.00 Direct labor cost per unit $ 3.75 $ 6.00 Number of units produced per year 4,000 100 Total Expected Activity J78 B52 Direct labor-hours 1,000 40 Machine-hours 3,200 30 Machine setups 5 1 Production orders 5 1 Shipments 10 1 Required: Compute the unit product cost of each product listed above. (Round your answers to 2 decimal places.) J78 B52 Unit product cost $ $

Answer 1

	J78	B52
Unit product cost	15.95	45.50
Workings:
Activity Cost Pool	J78	B52
Labor-related	7000	280
Machine-related	9600	90
Machine setups	200	40
Production orders	800	160
Shipments	1200	120
General factory	4000	160
Total overhead	22800	850
Divide by units	4000	100
Overhead per unit	5.70	8.50
Activity Cost Pool	J78	B52
Labor-related	=1000*7	=40*7
Machine-related	=3200*3	=30*3
Machine setups	=5*40	=1*40
Production orders	=160*5	=160*1
Shipments	=10*120	=1*120
General factory	=1000*4	=40*4
	J78	B52
Direct materials cost per unit	6.50	31.00
Direct labor cost per unit	3.75	6.00
Overhead per unit	5.70	8.50
Unit product cost	15.95	45.50