Reference no: EM132582912

Sydney Sussex Street (SSS) Company produces designer machines for stitching designer shirts. The company resorts to activity-based costing (ABC) system in applying it MOH/Indirect costs to output. SSS's Management Accountant identified four major activities in the company's manufacturing process and she budgeted their respective costs for the month of December 2019 as given in the following table:

Activity                         Total Budgeted Cost        Allocation Base

Handling of Materials             $156,900                 Number of parts

Setting up of Machine         $117,800                 Number of setups

Assembling of parts             $124,900                  Number of parts

Packaging of completed output $109,700        Number of finished units

SSS has budgeted to produce 2,300 designer machines in the month of December 2019. The machines are budgeted to use 31,700 parts in total and will need a total of 21 machine setups.

Required: Work out the following (Round off calculated figures to two decimal places):

Question a) The budgeted cost allocation rate for each of the four activities.

Question b) The total manufacturing cost of the entire output of the designer machines when each machine uses $201 worth of direct materials and $59 worth of direct labor.