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Determine the unit costs of cams

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Question - Two-Stage ABC for Manufacturing

Columbus Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:

Machine setup $600,000 12,000 setup hours
Material handling 120,000 2,000 tons of materials
Machine operation 500,000 10,000 machine hours

The following data are for the production of single batches of two products, C23 Cams and U2 Shafts:

Units produced 500 400
Machine hours 2 5
Direct labor hours 300 500
Direct labor cost $5,000 $10,000
Direct materials cost $30,000 $20,000
Tons of materials 12.5 8
Setup hours 5 7

Determine the unit costs of C23 Cams and U2 Shafts using ABC.

Reference no: EM131717958

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