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Activity Cost Allocation Base Setup $ 105,000 Number of setups Machine maintenance 60,000 Number of machine hours Total indirect manufacturing costs $ 165,000 Product A Product B Total Direct labor hours 7,000 5,000 12,000 Number of setups 30 170 200 Number of machine hours 1,600 2,400 4,000

Activity Cost Allocation Base Setup $ 105,000 Number of setups Machine maintenance 60,000 Number of machine hours Total indirect manufacturing costs $ 165,000 Product A Product B Total Direct labor hours 7,000 5,000 12,000 Number of setups 30 170 200 Number of machine hours 1,600 2,400 4,000

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Computing indirect manufacturing costs per unit

Darby Corp. Considering the use of activity-based costing. The following information is provided for the production of two product lines:

Darby plans to produce 375 units of Product A and 250 units of Product B. Compute the ABC indirect manufacturing cost per unit for each product.

Activity Cost Allocation Base Setup $ 105,000 Number of setups Machine maintenance 60,000 Number of machine hours Total indirect manufacturing costs $ 165,000 Product A Product B Total Direct labor hours 7,000 5,000 12,000 Number of setups 30 170 200 Number of machine hours 1,600 2,400 4,000
Transcribed Image Text:Activity Cost Allocation Base Setup $ 105,000 Number of setups Machine maintenance 60,000 Number of machine hours Total indirect manufacturing costs $ 165,000 Product A Product B Total Direct labor hours 7,000 5,000 12,000 Number of setups 30 170 200 Number of machine hours 1,600 2,400 4,000
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