Computation of unit cost using activity-based costing

Reference no: EM139752

Computation of unit cost using activity-based costing.

VG Company has identified the following cost pools and cost drivers:

COST POOLS	ACTIVITY COST	COST DRIVERS
Machine Setup	$360,000	6000 setup hours
Materials Handling	$100,000	50,000 pounds of material
Electric Power	$40,000	80,000 kilowatt hours

The following information pertains to the production of V203 and G179:

ITEMS	V203	G179
Number of units produced	5,000	15,000
Direct Materials Cost	$25,000	$33000
Direct Labor Cost	$14,000	$16,000
Number of Setup Hours	120	150
Pounds of Material Used	5,000	10,000
Kilowatt Hours	2,000	3,000

Determine the unit cost for each of the two products using activity-based costing.

Reference no: EM139752

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