Cycling Corporation identified the following budgeted data for this year. The company produces two types of bicycles, Recreational and Racing. Activity Budgeted Overhead Cost Budgeted Activity Handling materials $ 2,500,000 400,000 parts Quality inspection 360,000 6,000 inspections Purchasing 100,000 4,000 orders Total $ 2,960,000 The company allocates overhead cost based on 10,000 budgeted direct labor hours. The Recreational bicycle uses 5 direct labor hours per unit, and the Racing bicycle uses 10 direct labor hours per unit. Overhead cost per unit for the Racing bicycle is:
Cycling Corporation identified the following budgeted data for this year. The company produces two types of bicycles, Recreational and Racing. Activity Budgeted Overhead Cost Budgeted Activity Handling materials $ 2,500,000 400,000 parts Quality inspection 360,000 6,000 inspections Purchasing 100,000 4,000 orders Total $ 2,960,000 The company allocates overhead cost based on 10,000 budgeted direct labor hours. The Recreational bicycle uses 5 direct labor hours per unit, and the Racing bicycle uses 10 direct labor hours per unit. Overhead cost per unit for the Racing bicycle is:
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Cycling Corporation identified the following budgeted data for this year. The company produces two types of bicycles, Recreational and Racing.
| Activity | Budgeted |
Budgeted Activity | |
|---|---|---|---|
| Handling materials | $ 2,500,000 | 400,000 | parts |
| Quality inspection | 360,000 | 6,000 | inspections |
| Purchasing | 100,000 | 4,000 | orders |
| Total | $ 2,960,000 |
The company allocates overhead cost based on 10,000 budgeted direct labor hours. The Recreational bicycle uses 5 direct labor hours per unit, and the Racing bicycle uses 10 direct labor hours per unit. Overhead cost per unit for the Racing bicycle is:
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