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E4-20A Compute activity rates and unit cost (Learning Objective 2) Nano produces skin care products. The company uses an activity-based costing system and provides the following activity cost pools and cost drivers for the month of July: Activity Cost Pool Cost Pool Allocation Rates Labor related . $6.00 per direct labor hour Machine related $3.00 per machine hour Machine setup. $50.00 per setup Production orders . $120 per order Shipments.. $80.00 per shipment General factory.. $5.00 per direct labor hour

E4-20A Compute activity rates and unit cost (Learning Objective 2) Nano produces skin care products. The company uses an activity-based costing system and provides the following activity cost pools and cost drivers for the month of July: Activity Cost Pool Cost Pool Allocation Rates Labor related . $6.00 per direct labor hour Machine related $3.00 per machine hour Machine setup. $50.00 per setup Production orders . $120 per order Shipments.. $80.00 per shipment General factory.. $5.00 per direct labor hour

Practical Management Science
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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E4-20A Compute activity rates and unit cost (Learning Objective 2) Nano produces skin care products. The company uses an activity-based costing system and provides the following activity cost pools and cost drivers for the month of July: Activity Cost Pool Labor related . Cost Pool Allocation Rates $6.00 per direct labor hour Machine related . $3.00 per machine hour Machine setup.. $50.00 per setup Production orders. $120 per order Shipments. $80.00 per shipment General factory. $5.00 per direct labor hour
Transcribed Image Text:E4-20A Compute activity rates and unit cost (Learning Objective 2) Nano produces skin care products. The company uses an activity-based costing system and provides the following activity cost pools and cost drivers for the month of July: Activity Cost Pool Labor related . Cost Pool Allocation Rates $6.00 per direct labor hour Machine related . $3.00 per machine hour Machine setup.. $50.00 per setup Production orders. $120 per order Shipments. $80.00 per shipment General factory. $5.00 per direct labor hour
Nano has gathered the cost and activity data for two products: Product A and Product B. The direct costs and units of production for the two products are as follows: Product A Product B Direct labor cost per unit. $ 5.00 $ 6.20 Direct materials cost per unit. $15.00 $18.00 Number of units produced per month. 1,000 units 1,100 units Total Expected Activity Product A Product B Direct labor hours. . 180 hours 190 hours Machine hours.. 1,600 hours 2,000 hours Machine setup.. 3 setups 1 setup Production orders.. 3 1 Shipments. 2 1 General factory.. ? ? Requirements 1. What is the expected activity for general factory for both Product A and Product B? 2. Compute the unit product cost of Product A and Product B. What should the selling price of each product be if the company wishes to have a markup of 50% on both products?
Transcribed Image Text:Nano has gathered the cost and activity data for two products: Product A and Product B. The direct costs and units of production for the two products are as follows: Product A Product B Direct labor cost per unit. $ 5.00 $ 6.20 Direct materials cost per unit. $15.00 $18.00 Number of units produced per month. 1,000 units 1,100 units Total Expected Activity Product A Product B Direct labor hours. . 180 hours 190 hours Machine hours.. 1,600 hours 2,000 hours Machine setup.. 3 setups 1 setup Production orders.. 3 1 Shipments. 2 1 General factory.. ? ? Requirements 1. What is the expected activity for general factory for both Product A and Product B? 2. Compute the unit product cost of Product A and Product B. What should the selling price of each product be if the company wishes to have a markup of 50% on both products?
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