Compute the cost of 1000 units of bunkka-22 using the

Reference no: EM13579302

Mathias Company manufactures a number of specialized machine parts. Part Bunkka-22 uses $35 of direct materials and $15 of direct labor per unit.

Mathias' estimated manufacturing overhead is as follows:

Materials handling		$100,000
Machining		200,000
Factory supervision		150,000
Total		$450,000

Overhead is applied based on direct labor costs, which were estimated at $200,000.
Mathias is considering adopting activity-based costing. The cost drivers are estimated at:

Activity	Cost Driver	Expected Use
Materials handling	Weight of materials	50,000	pounds
Machining	Machine hours	20,000	hours
Factory supervision	Direct labor hours	12,000	hours

(a) Compute the cost of 1,000 units of Bunkka-22 using the current traditional costing system.

Total cost of Bunkka-22

:??

(b) Compute the cost of 1,000 units of Bunkka-22 using the proposed activity-based costing system. Assume the 1,000 units use 2,500 pounds of materials, 500 machine hours, and 1,000 direct labor hours. (Round intermediate calculations to 2 decimal places, e.g. 1.25.)

Total cost of Bunkka-22

Reference no: EM13579302

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