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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

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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### Cost Analysis of Patio Sets Production TC Company manufactures four types of patio sets: wood, plastic, wicker, and aluminum. Below is a comprehensive breakdown of the production data and cost allocation using the Activity-Based Costing (ABC) system. #### Production Data | Product Type | DLHs/unit | Annual Production | |--------------|-----------|-------------------| | Wood | 2.0 | 1,000 units | | Plastic | 1.0 | 2,000 units | | Wicker | 5.0 | 5,000 units | | Aluminum | 3.0 | 10,000 units | #### Additional Information - **Direct Material Costs:** - Wood: $40 per unit - Plastic: $20 per unit - Wicker: $60 per unit - Aluminum: $50 per unit - **Direct Labor Wage Rate:** - Standard rate: $15/hour - Aluminum: $20/hour due to production difficulty - **Processes:** - Wood and wicker sets undergo a special painting process. - Wood, plastic, and wicker sets include a sanding process. #### ABC System for Manufacturing Overhead Costs The ABC system categorizes costs into activity pools, each defined by activity measures: | Activity Cost Pool | Activity Measure | Estimated Cost | Level of Activity | |--------------------|------------------|----------------|---------------------------| | | | | Wood | Plastic | Wicker | Aluminum | | Mach setups | # of setups | $136,000 | 100 | 100 | 500 | 1,000 | | Painting | # pints used | $30,000 | 250 | | 1,250 | | | Sanding | # machine hrs | $17,500 | 250 | 500 | 1,000 | | | Gen. factory | # DLHs | $354,000 | 2,000| 2,000 | 25,000 | 30,000 | #### Cost Calculation The total cost per unit under the ABC system for wicker patio sets is calculated. ##### Question: What is the total cost per unit under the ABC system for wicker patio sets? ##### Options: - a. $
Transcribed Image Text:### Cost Analysis of Patio Sets Production TC Company manufactures four types of patio sets: wood, plastic, wicker, and aluminum. Below is a comprehensive breakdown of the production data and cost allocation using the Activity-Based Costing (ABC) system. #### Production Data | Product Type | DLHs/unit | Annual Production | |--------------|-----------|-------------------| | Wood | 2.0 | 1,000 units | | Plastic | 1.0 | 2,000 units | | Wicker | 5.0 | 5,000 units | | Aluminum | 3.0 | 10,000 units | #### Additional Information - **Direct Material Costs:** - Wood: $40 per unit - Plastic: $20 per unit - Wicker: $60 per unit - Aluminum: $50 per unit - **Direct Labor Wage Rate:** - Standard rate: $15/hour - Aluminum: $20/hour due to production difficulty - **Processes:** - Wood and wicker sets undergo a special painting process. - Wood, plastic, and wicker sets include a sanding process. #### ABC System for Manufacturing Overhead Costs The ABC system categorizes costs into activity pools, each defined by activity measures: | Activity Cost Pool | Activity Measure | Estimated Cost | Level of Activity | |--------------------|------------------|----------------|---------------------------| | | | | Wood | Plastic | Wicker | Aluminum | | Mach setups | # of setups | $136,000 | 100 | 100 | 500 | 1,000 | | Painting | # pints used | $30,000 | 250 | | 1,250 | | | Sanding | # machine hrs | $17,500 | 250 | 500 | 1,000 | | | Gen. factory | # DLHs | $354,000 | 2,000| 2,000 | 25,000 | 30,000 | #### Cost Calculation The total cost per unit under the ABC system for wicker patio sets is calculated. ##### Question: What is the total cost per unit under the ABC system for wicker patio sets? ##### Options: - a. $
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