Compute the total indirect production costs

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Reference no: EM133039534

Problem - The manufacturing division of an electronics company uses activity-based costing. The company has identified three activities and the related cost drivers for indirect production costs.

 

Cost Driver

Activity 1

Direct labor cost

Activity 2

Direct materials cost

Activity 3

Kilowatt hours

Three types of products are produced. Direct costs and cost-driver activity for each product for a month are as follows:

 

Product A

Product B

Product C

Direct materials cost

$125,000

$50,000

$75,000

Direct labor cost

$1,000

$3,000

$2,000

Direct labor hours

500

1,500

1,000

Kilowatt hours

325,000

75,000

200,000

Indirect production costs for the month are as follows:

Activity 1

$18,000

Activity 2

25,000

Activity 3

60,000

Total

$103,000

Required - Compute the total Indirect Production Costs allocated to Product A.

Reference no: EM133039534

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