Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system containsthe following six activity cost pools and activity rates:Activity RatesActivity Cost PoolLabor-relatedMachine-relatedMachine setupsProduction ordersShipmentsGeneral factoryME$ 5.00 per direct labor-hour$ 4.00 per machine-hour$ 60.00 per setup$ 100.00 per order$ 120.00pershipment$ 4.00 per direct labor-hourCost and activity data have been supplied for the following products:378852Direct materials cost per unitDirect labor cost per unit$ 3.50$ 20.00$ 3.75Number of units produced per year$9.004002,000Direct labor-hoursMachine-hoursMachine setupsProduction ordersChinmanteTotal ExpectedActivity3788521,200402,8002044A774 B52Direct materials cost per unitDirect labor cost per unit$ 20.00$9.00400Number of units produced per year.Total ExpectedActivity3788521,20040Direct labor-hoursMachine-hours2,800207Machine setupsProduction orders:Shipments745Required:Compute the unit product cost of each product listed above. (Do not round intermediate calculations. Round your answersto 2 decimal places.)378852Unit product costTULEE378$ 3.50$ 3.752,000

First we need to calculate Total Activity Cost.

Activity Rates $ 5.00 per direct labor-hour ivity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory $4.00 per machine-hour $ 60.00 per setup $ 100.00 per order $ 120.00 per shipment $ 4.00 per direct labor-hour Cost and activity data have been supplied for the following products: 378 852 Direct materials cost per unit Direct labor cost per unit $ 3.50 $ 20.00 $ 3.75 $ 9.00 Number of units produced per year 2,000 400 Direct labor-hours Machine-hours Machine setups Production orders Chinmante Total Expected Activity 378 852 1,200 40 2,800 20 7 4 7

Activity Rates $ 5.00 per direct labor-hour ivity Cost Pool Labor-related Machine-related Machine setups Production orders Shipments General factory $4.00 per machine-hour $ 60.00 per setup $ 100.00 per order $ 120.00 per shipment $ 4.00 per direct labor-hour Cost and activity data have been supplied for the following products: 378 852 Direct materials cost per unit Direct labor cost per unit $ 3.50 $ 20.00 $ 3.75 $ 9.00 Number of units produced per year 2,000 400 Direct labor-hours Machine-hours Machine setups Production orders Chinmante Total Expected Activity 378 852 1,200 40 2,800 20 7 4 7

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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