costacctg13_sm_ch05

17permachinehour simplecostingsystem cost

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Unformatted text preview: (10–15 min.) ABC, process costing. Note to instructors: The “number of production runs” for the financial calculator should be 50 and not 0. Please announce this change to your students before assigning this problem. Rates per unit cost driver. Activity Cost Driver Machining Machine­hours Rate $375,000 ÷ (25,000 + 50,000) = $5 per machine­hour $120,000 ÷ (50 + 50) = $1,200 per production run $105,000 ÷ (1,000 + 500) = $70 per inspect ion­hour Set up Production runs Inspect ion Inspect ion­hours Overhead cost per unit: Machining: $5 × 25,000; 50,000 Set up: $1,200 × 50; $1,200 × 50 Inspect ion: $70 × 1,000; $70 × 500 Total manufacturing overhead costs Divide by number of unit s Manufacturing overhead cost per unit 2. Mathematical Financial Manufacturing cost per unit: Direct materials $150,000 ÷ 50,000 $300,000 ÷ 100,000 Direct manufacturing labor $50,000 ÷ 50,000 $100,000 ÷ 100,000 Manufacturing overhead ( from requirement 1) Manufacturing cost per unit Mathematical Financial $125,000 $250,000 60,000 60...
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