TC Company makes four types of patio sets: wood, plastic, wicker, and aluminum. Data regarding the four products follows: DLHs/unit Annual Production 1,000 units 2,000 units 5,000 units 10,000 units Wood Plastic Wicker Aluminum Additional information about the company follows: • Wood sets require $40 in direct materials per unit, plastic sets require $20, wicker sets require $60 and aluminum sets require $50. • The direct labor wage rate for all production except for the aluminum sets is $15 per hour. Aluminum sets are more difficult to produce, so the wage rate for direct labor is $20 per hour. • Wood and wicker sets go through a special painting process. Wood, plastic, and wicker sets all go through the sanding process. The ABC system used for allocating Manufacturing Overhead Costs has the following activity pools: Level of Activity 2.0 1.0 5.0 3.0 Estimated Cost Activity Cost Pool Activity Measure Mach setups Wood Plastic Wicker Aluminum $136,000 100 100 500 $30,000 250 1,250 # of setups #pints used 1,000 Painting Sanding # machine hrs. $17,500 250 500 1,000 Gen. factory # DLHS $354,000 2,000 2,000 25,000 30,000 What is the total cost per unit under the ABC system for wicker patio sets? Select one: O a. $45.00 O b. $135.00 O c. $147.50 O d. $180.00
TC Company makes four types of patio sets: wood, plastic, wicker, and aluminum. Data regarding the four products follows: DLHs/unit Annual Production 1,000 units 2,000 units 5,000 units 10,000 units Wood Plastic Wicker Aluminum Additional information about the company follows: • Wood sets require $40 in direct materials per unit, plastic sets require $20, wicker sets require $60 and aluminum sets require $50. • The direct labor wage rate for all production except for the aluminum sets is $15 per hour. Aluminum sets are more difficult to produce, so the wage rate for direct labor is $20 per hour. • Wood and wicker sets go through a special painting process. Wood, plastic, and wicker sets all go through the sanding process. The ABC system used for allocating Manufacturing Overhead Costs has the following activity pools: Level of Activity 2.0 1.0 5.0 3.0 Estimated Cost Activity Cost Pool Activity Measure Mach setups Wood Plastic Wicker Aluminum $136,000 100 100 500 $30,000 250 1,250 # of setups #pints used 1,000 Painting Sanding # machine hrs. $17,500 250 500 1,000 Gen. factory # DLHS $354,000 2,000 2,000 25,000 30,000 What is the total cost per unit under the ABC system for wicker patio sets? Select one: O a. $45.00 O b. $135.00 O c. $147.50 O d. $180.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:TC Company makes four types of patio sets: wood, plastic, wicker, and aluminum. Data regarding the four products follows:
DLHs/unit Annual Production
1,000 units
2,000 units
5,000 units
10,000 units
Wood
Plastic
Wicker
Aluminum
Additional information about the company follows:
• Wood sets require $40 in direct materials per unit, plastic sets require $20, wicker sets require $60 and aluminum sets require $50.
The direct labor wage rate for all production except for the aluminum sets is $15 per hour. Aluminum sets are more difficult to produce, so the wage rate for direct labor is $20
per hour.
• Wood and wicker sets go through a special painting process.
• Wood, plastic, and wicker sets all go through the sanding process.
The ABC system used for allocating Manufacturing Overhead Costs has the following activity pools:
Level of Activity
●
Estimated
Cost Wood Plastic Wicker Aluminum
$136,000 100 100
$30,000 250
1,000
500
1,250
$17,500 250 500 1,000
$354,000 2,000 2,000 25,000
What is the total cost per unit under the ABC system for wicker patio sets?
2.0
1.0
5.0
3.0
Activity Cost Pool Activity Measure
Mach setups
# of setups
# pints used
# machine hrs
# DLHS
Painting
Sanding
Gen. factory
Select one:
a. $45.00
b. $135.00
c. $147.50
d. $180.00
30,000
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