Cost per unit of the windows produced

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Reference no: EM13522414

Woodland Industries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $15 per hour and that there were no beginning inventories. The following information was available for 2013, based on an expected production level of 50,000 units for the year, which will require 200,000 direct labor hours:

Activity cost Driver

Budgeted 
Costs for 2013

Cost Driver Used 
as Allocation Base

Cost 
Allocation Rate


Materials handling

$250,000

Number of parts used

$0.20

per part

Cutting and lathe work

1,750,000

Number of parts used

1.40

per part

Assembly and inspection

4,000,000

Direct labor hours

20.00


the following production, costs, and activities occurred during the month of July:

Units 
Produced

Direct 
Materials Costs

Number 
of Parts Used

Direct 
Labor Hours

3,200

$107,200

70,400

13,120

1, Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of July (using the activity-based costing approach).

Total Manufacturing Cost:

Cost Per Unit Produced:

2. Assume instead that Woodland Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of July. (Hint: You will need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2013.)(Round ""cost per unit produced"" to 2 decimal places.)

Reference no: EM13522414

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