Rundle Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The productionprocess is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. Thecompany has identified five major activities involved in producing the keyboards.ActivityMaterials receiving & handlingProduction setupAssemblyQuality inspectionPacking and shippingActivity measures for the two kinds of keyboards follow:LaptopsDesktopsRequiredLabor Cost$ 1,3101,200Laptop keyboardsDesktop keyboardsAllocation BaseCost of materialNumber of setupsNumber of partsInspection timeNumber of ordersMaterial Number of Number ofCost$ 6,3007,600Cost Per UnitSetups2913Parts4926Allocation Rate3% of material cost$102.00 per setup$3.00 per part$ 1.60 per minute$9.00 per orderInspection Time7,400 minutes4,800 minutesa. Compute the cost per unit of laptop and desktop keyboards, assuming that Rundle made 240 units of each type of keyboard.Note: Round your answers to 2 decimal places.Number ofOrders6425

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the cost per unit of laptop and desktop keyboards

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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Question

Rundle Manufacturing produces two keyboards, one for laptop computers and the other for desktop computers. The production
process is automated, and the company has found activity-based costing useful in assigning overhead costs to its products. The
company has identified five major activities involved in producing the keyboards.
Activity
Materials receiving & handling
Production setup
Assembly
Quality inspection
Packing and shipping
Activity measures for the two kinds of keyboards follow:
Laptops
Desktops
Required
Labor Cost
$ 1,310
1,200
Laptop keyboards
Desktop keyboards
Allocation Base
Cost of material
Number of setups
Number of parts
Inspection time
Number of orders
Material Number of Number of
Cost
$ 6,300
7,600
Cost Per Unit
Setups
29
13
Parts
49
26
Allocation Rate
3% of material cost
$102.00 per setup
$3.00 per part
$ 1.60 per minute
$9.00 per order
Inspection Time
7,400 minutes
4,800 minutes
a. Compute the cost per unit of laptop and desktop keyboards, assuming that Rundle made 240 units of each type of keyboard.
Note: Round your answers to 2 decimal places.
Number of
Orders
64
25

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