Reference no: EM131806317

Activity-Based Costing and Conventional Costs Compared

Hickory Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month.

Gas Cooker	Charcoal Smoker
Units	1,000	5,000
Number of batches	40	10
Number of batch moves	80	40
Direct materials	$40,000	$100,000
Direct labor	$22,000	$27,000

Manufacturing overhead follows:

Activity	Cost
Materials acquisition and inspection	$30,800
Materials movement	16,200
Scheduling	36,000
	$83,000

Required

hint use 1.6939 for overhead rate calculations

a. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead is assigned on the basis of direct labor dollars.

b. Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.