Direct materials cost $ 80.00 Direct labor cost 20.00 Activity-based casts allocated Total manufacturing product cost The activities required to build the component follow: Activity Allocation Base Cost Allocated to Each Unit Start slation Number of raw component chassis $ 1.50 4 $ 6.00 Dip insertion Manual insertion Number of dip insertions 0.30 9.60 Number of manual insertions 10 0.50 Wave solder Number of components soldered 1.90 7.60 Backload Number of backload nserticns 4.20 %3D Test Number of testing haurs 0.43 90.00 Defect analysis Total activity-hased costs Number of defect analysis hours 0.15 12.00
Direct materials cost $ 80.00 Direct labor cost 20.00 Activity-based casts allocated Total manufacturing product cost The activities required to build the component follow: Activity Allocation Base Cost Allocated to Each Unit Start slation Number of raw component chassis $ 1.50 4 $ 6.00 Dip insertion Manual insertion Number of dip insertions 0.30 9.60 Number of manual insertions 10 0.50 Wave solder Number of components soldered 1.90 7.60 Backload Number of backload nserticns 4.20 %3D Test Number of testing haurs 0.43 90.00 Defect analysis Total activity-hased costs Number of defect analysis hours 0.15 12.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Computing product costs in an ABC system
The Alright Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit):
Requirements
- Complete the missing items for the two tables.
- Why might managers favor this ABC system instead of Alright’s older system, which allocated all
manufacturing overhead costs on the basis of direct labor hours?
Transcribed Image Text:Direct materials cost
$ 80.00
Direct labor cost
20.00
Activity-based casts allocated
Total manufacturing product cost
The activities required to build the component follow:
Activity
Allocation Base
Cost Allocated to Each Unit
Start slation
Number of raw component chassis
$ 1.50
4
$ 6.00
Dip insertion
Manual insertion
Number of dip insertions
0.30
9.60
Number of manual insertions
10
0.50
Wave solder
Number of components soldered
1.90
7.60
Backload
Number of backload nserticns
4.20
%3D
Test
Number of testing haurs
0.43
90.00
Defect analysis
Total activity-hased costs
Number of defect analysis hours
0.15
12.00
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