The company has an ABC costing system in place and the following information is relevant. There are five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information for the month of February is presented below: Cost Drivers by Product Activity Cost Pool Cost Driver Est. Overhead Budget Deluxe Ordering and Receiving Orders $ 130,000 600 400 Machine Setup Setups 297,000 500 400 Machining Machine hours 1,000,000 150,000 100,000 Assembly Parts 1,600,000 1,200,000 800,000 Inspection Inspections 300,000 550 450 Required: Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe
C1) The company has an ABC costing system in place and the following information is relevant.
There are five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information for the month of February is presented below:
Cost Drivers by Product
Activity Cost Pool Cost Driver Est. Overhead Budget Deluxe
Ordering and Receiving Orders $ 130,000 600 400
Machine Setup Setups 297,000 500 400
Machining Machine hours 1,000,000 150,000 100,000
Assembly Parts 1,600,000 1,200,000 800,000
Inspection Inspections 300,000 550 450
Required:
- Compute the overhead cost per unit for each product. Production is 700,000 units of Budget and 200,000 units of Deluxe. 20 Marks
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