Reference no: EM132829947

Question - Drilling Company uses activity-based costing and provides this information:

Manufacturing Activity	Cost Driver	Driver Rate
Materials handling	Number of parts	$0.4
Machinery	Number of machine hours	55
Assembly	Number of parts	3.05
Inspection	Number of finished units	34

Drilling has just completed 84 units of a component for a customer. Each unit required 104 parts and 3.20 machine hours. The prime cost is $1,340 per finished unit. All other manufacturing costs are classified as manufacturing overhead.

Required -

1. Compute the total manufacturing costs and the unit costs of the 84 units just completed using ABC costing.

2. In addition to the manufacturing costs, the firm has determined that the total cost of upstream activities, including research and development and product design, is $184 per unit. The total cost of downstream activities, such as distribution, marketing, and customer service, is $304 per unit. Compute the full product cost per unit, including upstream, manufacturing, and downstream activities. Also compute the relative proportion of each main cost category.