Galvaset indutries manufactures and sells custom-made

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Reference no: EM13582615

Activity-based costing versus traditional overhead allocation methods [LO 9]

Galvaset Indutries 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 . Assume that the direct labor rate is $20 per hour and that there were no beginning inventories. The following information was available for 2010, 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 2010		Cost Driver Used as Allocation Base	Cost Allocation Rate
Materials handling	$	325,000	Number of parts used	$	0.25	per part
Cutting and lathe work		2,340,000	Number of parts used		1.80	per part
Assembly and inspection		5,000,000	Direct labor hours		25.00	per hour

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

Units Produced	Direct Materials Costs	Number of Parts Used	Direct Labor Hours
3,800	$142,000	83,600	17,180

Required:
(a)	Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of March (using the activity-based costing approach). (Round "cost per unit produced" to 2 decimal places and the rest to the nearest dollar amount. Omit the "$" sign in your response.)


Total manufacturing cost	$
Cost per unit produced	$

Reference no: EM13582615

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