Compute the total cost of one b model

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Reference no: EM131746883

Question: A Company manufactures smartphones. It makes two different models: A Model and the B Model. Data below.


A Model

B Model

Annual Production (units)

400,000

50,000

Direct labor hours per unit

0.25

0.50

Direct materials pounds per unit

0.05

0.10

Direct labor cost per unit

$6

$20

Direct materials cost per unit

$50

$90

Cost Pool

Cost

Cost Driver

A

Model

B

Model

Materials ordering

      $2,000,000

# of purchase orders

18,000

2,000

Equipment setup

3,000,000

# of setups

900

100

Quality control

1,000,000

# of inspections

800

200

Total overhead costs

$6,000,000




Compute the total cost of one B Model if ABC principles are used to allocate overhead costs.

Compute the total cost of one B Model if all overhead costs are allocated based on pounds of direct material.

Reference no: EM131746883

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