Piper Products Company manufactures two types of engineering diagnostic equipment used in construction. The two products are based upon different technologies, x-ray and ultra-sound, but are manufactured in the same factory. Piper has computed the manufacturing cost of the x-ray and ultra-sound products by adding together direct materials, direct labor, and overhead cost applied based on the number of direct labor hours. The factory has three overhead departments that support the single production line that makes both products. Budgeted overhead spending for the departments is as follows. Budgeted Overhead Department Engineering Materials Setup Design Handling $13,200 Total $11,000 $6,600 $30,800 Piper's budgeted manufacturing activities and costs for the period are as follows. Product Activity X-Ray Ultra-Sound Units produced and sold 50 100 Direct materials used $11,000 $17,600 Direct labor hours used 100 300 Direct labor cost $8,800 $26,400 Number of parts used 400 600 Number of engineering changes 2 1 Number of product setups 8 7 The budgeted cost to manufacture one ultra-sound machine using the activity-based costing method is: Select one: a. $671 b. $645 О с. $581 d. $495
Piper Products Company manufactures two types of engineering diagnostic equipment used in construction. The two products are based upon different technologies, x-ray and ultra-sound, but are manufactured in the same factory. Piper has computed the manufacturing cost of the x-ray and ultra-sound products by adding together direct materials, direct labor, and overhead cost applied based on the number of direct labor hours. The factory has three overhead departments that support the single production line that makes both products. Budgeted overhead spending for the departments is as follows. Budgeted Overhead Department Engineering Materials Setup Design Handling $13,200 Total $11,000 $6,600 $30,800 Piper's budgeted manufacturing activities and costs for the period are as follows. Product Activity X-Ray Ultra-Sound Units produced and sold 50 100 Direct materials used $11,000 $17,600 Direct labor hours used 100 300 Direct labor cost $8,800 $26,400 Number of parts used 400 600 Number of engineering changes 2 1 Number of product setups 8 7 The budgeted cost to manufacture one ultra-sound machine using the activity-based costing method is: Select one: a. $671 b. $645 О с. $581 d. $495
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Transcribed Image Text:Piper Products Company manufactures two types of engineering diagnostic equipment used in construction. The two products are based upon different technologies, x-ray and ultra-sound, but are manufactured in the same factory. Piper has
computed the manufacturing cost of the x-ray and ultra-sound products by adding together direct materials, direct labor, and overhead cost applied based on the number of direct labor hours.
The factory has three overhead departments that support the single production line that makes both products. Budgeted overhead spending for the departments is as follows.
Budgeted Overhead
Department
Engineering Materials Setup
Design Handling
$13,200
Total
$11,000 $6,600 $30,800
Piper's budgeted manufacturing activities and costs for the period are as follows.
Product
Activity
X-Ray Ultra-Sound
Units produced and sold
50
100
Direct materials used
$11,000
$17,600
Direct labor hours used
100
300
Direct labor cost
$8,800
$26,400
Number of parts used
400
600
Number of engineering changes
2
1
Number of product setups
8
7
The budgeted cost to manufacture one ultra-sound machine using the activity-based costing method is:
Select one:
a. $671
b. $645
О с.
$581
d. $495
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