Compare the total per-unit cost of manufacturing plastic

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Reference no: EM133342239

Braxit Corporation makes plastic and wooden picture frames. The company has assigned $105,000 in monthly manufacturing overhead costs to two cost pools as follows: $65,000 to power costs, and $40,000 to production set-up costs.

	Plastic Frames	Wooden Frames
Sales Revenue	$ 230,000	$ 178,000
Direct Material	$ 104,000	$ 42,400
Direct Labour	$ 54,000	$ 93,700
Machine Hours	102,000	8300
Production Runs	60	40
Unit produced and sold	57,000	30,000

Power costs are allocated to products using machine hours as an activity base. Set-up costs are allocated to products based on the number of productions runs each product line requires.

(a) Allocate manufacturing overhead from the activity cost pools to each product line.
(b) Compare the total per-unit cost of manufacturing plastic frames and wooden frames.
(c) On a per-unit basis, which product line appears to be most profitable?

Reference no: EM133342239

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