Galvaset Indutries manufactures and sells custom

Galvaset Indutries manufactures and sells custom - $115,500...

Info iconThis preview shows page 1. Sign up to view the full content.

View Full Document Right Arrow Icon
Galvaset Indutries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $14 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 47,700 units for the year, which will require 232,000 direct labor hours: Activity (Cost Driver) Budgeted Costs for 2010 Cost Driver Used as Allocation Base Cost Allocation Rate Materials handling $ 269,120 Number of parts used $ 0.16 per part Cutting and lathe work 1,818,880 Number of parts used 1.4 per part Assembly and inspection 4,640,000 Direct labor hours 20.0 0 per hour The following production, costs, and activities occurred during the month of March: Units Produced Direct Materials Costs Number of Parts Used Direct Labor Hours 3,250
Background image of page 1
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: $115,500 101,602 13,600 Required: (a) Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of March (using the activity-based costing approach). (Round "cost per unit produced" to 2 decimal places and the rest to the nearest dollar amount. Omit the "$" sign in your response.) Total manufacturing cost $ Cost per unit produced $ (b) Assume instead that Galvaset Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of March. ( Hint: You will need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2010.) (Do not round your intermediate calculations. Round "cost per unit produced" to 2 decimal places and the rest to the nearest dollar amount. Omit the "$" sign in your response.)...
View Full Document

Ask a homework question - tutors are online