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Question - Two-Stage ABC for Manufacturing - Merlot Company has determined its activity cost pools and cost drivers to be the following:
Cost Pools
Setup $84,000
Material handling 19,200
Machine operation 360,000
Packing 60,000
Total indirect manufacturing costs $523,200
Cost drivers
Setups 350
Material moves 640
Machine hours 20,000
Packing orders 1,200
One product made by Merlot, metal casements, used the following activities during the period to produce 500 units:
Setups 20
Material moves 80
Machine hours 1,900
Packing orders 150
Required -
a. Calculate the cost per unit of activity for each activity cost pool for Merlot Company.
b. Calculate the manufacturing overhead cost per metal casement manufactured during the period. Round cost per unit to two decimal places, if needed.
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