Reference no: EM132667003

Palmer Company uses an activity-based costing system. It has the following manufacturing activity areas, related drivers used as allocation bases, and cost allocation rates:

Activity                      Cost driver                   Cost allocation rate

Machine set-up     Number of set-ups            $50.00

Materials handling  Number of parts                   0.50

Machining          Machine hours                     26.00

Assembly           Direct labour hours                 22.00

Inspection        Number of finished units           12.00

During the month, 100 units were produced, requiring two setups. Each unit consisted of 19 parts, used 1.5 direct labour hours, and 1.25 machine hours. Direct materials cost $100 per finished unit. All other manufacturing costs are classified as conversion costs. ABC costs for research and marketing costs are $140. All other non-manufacturing ABC costs are $320 per unit.

Required

Problem (a) Calculate the manufacturing cost per unit for the period.

Problem (b) Calculate the total cost (manufacturing and non-manufacturing costs) per unit for the period.