A Midwest producer of specialty farming equipment, Agriboon, has three products that the company needs costing information about. The following information is available for each product. XY263 GO987 TR345 Direct material cost per unit $2.00 $8.00 $10.00 Direct labor cost per hour $15.00 $16.75 $18.00 Agriboon presently applies overhead using a predetermined rate based on direct labor hours. Estimated Direct Labor hours for the year are 132,026. The product leader for GO987 has suggested that Agriboon switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year: Activity Recommended Cost Driver Estimated Cost Estimated Cost Driver Units Materials Handling Requisition Request $38,912 1,216 Request Machine Operations Machine Hours $142,500 12,000 Hours Safety Compliance Compliance Test $125,000 1,100 Test Total OH Cost $306,412 What is the cost driver rate for Materials Handling Cost? Group of answer choices $27 $114 $32 $0.03
A Midwest producer of specialty farming equipment, Agriboon, has three products that the company needs costing information about.
The following information is available for each product.
|
|
XY263 |
GO987 |
TR345 |
|
Direct material cost per unit |
$2.00 |
$8.00 |
$10.00 |
|
Direct labor cost per hour |
$15.00 |
$16.75 |
$18.00 |
Agriboon presently applies
The product leader for GO987 has suggested that Agriboon switch to activity-based costing and identified the following activities, cost drivers, estimated costs, and estimated cost driver units for the year:
|
Activity |
Recommended Cost Driver |
Estimated Cost |
Estimated Cost Driver Units |
|
Materials Handling |
Requisition Request |
$38,912 |
1,216 Request |
|
Machine Operations |
Machine Hours |
$142,500 |
12,000 Hours |
|
Safety Compliance |
Compliance Test |
$125,000 |
1,100 Test |
|
|
Total OH Cost |
$306,412 |
|
What is the cost driver rate for Materials Handling Cost?
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