Compute the manufacturing cost per unit for each product

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Reference no: EM131975744

Problem

Sherlock Company produces mathematical and financial calculators and operates at capacity. Data related to the two products are presented here:

	Mathematical	Financial
Annual production in units	50,000	100,000
Direct material costs	$150,000	$300,000
Direct manufacturing labour costs	$50,000	$100,000
Direct manufacturing labour hours	2,500	5,000
Machine hours	25,000	50,000
Number of production runs	50	50
Inspection hours	1,000	500

Total manufacturing overhead costs are as follows:

Total
Machining costs $375,000
Set up costs $120,000
Inspection costs $105,000

1. Choose a cost driver for each overhead cost pool and calculate the manufacturing overhead cost per unit for each product. 5 marks

2. Compute the manufacturing cost per unit for each product.

Reference no: EM131975744

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