Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below: Activity Cost Activity driver Material handling P120,000 Number of parts Material insertion 240,000 Number of parts Automated 350,000 Machine hours Machinery finishing 150,000 Labor hours Packaging 90,000 Orders shipped The following data are provided for each product line: Activity Bronze Silver Gold Units to be produced 6,000 4,000 2,000 Orders to be shipped 1,200 800 400 Number of parts per unit 4. 5 8 Machine hours per unit 1 2 3 Labor hours per unit 2 3 3 Required: Computation of the cost per unit of the 3 products using ABC.
Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below:
|
Activity |
Cost |
Activity driver |
|
Material handling |
P120,000 |
Number of parts |
|
Material insertion |
240,000 |
Number of parts |
|
Automated |
350,000 |
Machine hours |
|
Machinery finishing |
150,000 |
Labor hours |
|
Packaging |
90,000 |
Orders shipped |
The following data are provided for each product line:
|
Activity |
Bronze |
Silver |
Gold |
|
Units to be produced |
6,000 |
4,000 |
2,000 |
|
Orders to be shipped |
1,200 |
800 |
400 |
|
Number of parts per unit |
4. |
5 |
8 |
|
Machine hours per unit |
1 |
2 |
3 |
|
Labor hours per unit |
2 |
3 |
3 |
Required: Computation of the cost per unit of the 3 products using ABC.
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