Thornton 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 Allocation Base Cost of material Number of setups Number of parts Inspection time Number of orders Activity measures for the two kinds of keyboards follow: Allocation Rate 3% of material cost $112.00 per setup $ 6.00 per part $ 1.20 per minute $ 11.00 per order Laptops Desktops Labor Cost $ 1,210 1,100 Material Cost $ 5,600 7,300 Setups 28 Number of Number of Parts 44 13 28 Inspection Time 6,900 minutes 4,800 minutes Number of Orders 66 17 Required a. Compute the cost per unit of laptop and desktop keyboards, assuming that Thornton made 340 units of each type of keyboard. Note: Round your answers to 2 decimal places. Cost Per Unit Laptop keyboards Desktop keyboards
Thornton 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 Allocation Base Cost of material Number of setups Number of parts Inspection time Number of orders Activity measures for the two kinds of keyboards follow: Allocation Rate 3% of material cost $112.00 per setup $ 6.00 per part $ 1.20 per minute $ 11.00 per order Laptops Desktops Labor Cost $ 1,210 1,100 Material Cost $ 5,600 7,300 Setups 28 Number of Number of Parts 44 13 28 Inspection Time 6,900 minutes 4,800 minutes Number of Orders 66 17 Required a. Compute the cost per unit of laptop and desktop keyboards, assuming that Thornton made 340 units of each type of keyboard. Note: Round your answers to 2 decimal places. Cost Per Unit Laptop keyboards Desktop keyboards
Cornerstones of Cost Management (Cornerstones Series)
4th Edition
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Don R. Hansen, Maryanne M. Mowen
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 36P: Reducir, Inc., produces two different types of hydraulic cylinders. Reducir produces a major...
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