Solution-Calculate the cost per unit

Calculate the cost per unit

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Reference no: EM133162210

Question - Prince Rupert Company manufactures product A. B, C and D. Data for the year ended Dec 31, 2021, is as follows.

Product	Units/ Production	Production run	Cost of material per unit ($)	Direct labour hours required per unit	Machine hours required per unit
A	20	3	80	2	1
B	40	4	60	5	8
C	45	6	70	7	5
D	120	12	65	9	3

Cost of Direct labor per hour: $ 6

Overhead costs for Prince Rupert company.

Set up cost	$12,000
Handling material cost	$6,000
Scheduling costs	$14,000

Required -

1. Using the peanut butter costing approach, calculate the cost per unit. (use Direct labor hours as a basis of allocation)

2. Using ABC Costing, calculate the cost per unit. Please justify why you choose that allocation base.

3. Show the difference of cost per unit using peanut butter and ABC costing.

Reference no: EM133162210

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Calculate the cost per unit : Prince Rupert Company manufactures product A. B, C and D. Cost of Direct labor per hour: $ 6. Calculate the cost per unit

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Calculate the cost per unit

Reference no: EM133162210

Reference no: EM133162210

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