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product cost

FINANCIAL ACCOUNTING
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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Bobzien, Incorporated, manufactures and sells two products: Product B7 and Product Z5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product B7 Product Z5 Total direct labor-hours Expected Production 300 800 Activity Cost Pools Labor-related Production orders Order size Direct Labor- Hours Per Activity Measures DLHs orders MHs The direct labor rate is $15.10 per DLH. The direct materials cost per unit is $136.20 for Product B7 and $204.40 for Product Z5. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Estimated Overhead Cost Unit 5.0 3.0 $ 39,585 26,884 462, 768 $ 529,237 Total Direct Labor- Hours 1,500 2,400 3,900 Product B7 Product Z5 1,500 2,400 500 600 4,600 4,700 Total 3,900 1,100 9,300 The unit product cost of Product Z5 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
Transcribed Image Text:Bobzien, Incorporated, manufactures and sells two products: Product B7 and Product Z5. Data concerning the expected production of each product and the expected total direct labor-hours (DLHs) required to produce that output appear below: Product B7 Product Z5 Total direct labor-hours Expected Production 300 800 Activity Cost Pools Labor-related Production orders Order size Direct Labor- Hours Per Activity Measures DLHs orders MHs The direct labor rate is $15.10 per DLH. The direct materials cost per unit is $136.20 for Product B7 and $204.40 for Product Z5. The company is considering adopting an activity-based costing system with the following activity cost pools, activity measures, and expected activity: Expected Activity Estimated Overhead Cost Unit 5.0 3.0 $ 39,585 26,884 462, 768 $ 529,237 Total Direct Labor- Hours 1,500 2,400 3,900 Product B7 Product Z5 1,500 2,400 500 600 4,600 4,700 Total 3,900 1,100 9,300 The unit product cost of Product Z5 under activity-based costing is closest to: (Round your intermediate calculations to 2 decimal places.)
O $656.80 per unit $590.82 per unit $542.04 per unit $730.82 per unit
Transcribed Image Text:O $656.80 per unit $590.82 per unit $542.04 per unit $730.82 per unit
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