Solution-What is the indirect manufacturing costs per

What is the indirect manufacturing costs per remote control

Reference no: EM133185379

Question - TIGER Corporation manufactures remote controls. Currently the company uses a plant-wide rate for allocating manufacturing overhead. The plant manager believes it is time to refine the method of cost allocation and has the accounting department identify the primary production activities and their cost drivers:

Activities	Cost Driver	Allocation Rate
Material handling	Number of parts	P2.00 per part
Assembly	Labor hours	P20.00 per hour
Inspection	Time at inspection station	P3.00 per minute

The current traditional cost method allocates overhead based on direct manufacturing labor hours using a rate of P200 per labor hour.

1. What is the indirect manufacturing costs per remote control assuming the traditional method is used and a batch of 500 remote controls are produced? The batch requires 1,000 parts, 10 direct manufacturing labor hours, and 15 minutes of inspection time.

A. P3.25

B. P2.00

C. P0.25

D. P4.00

2. What is the indirect manufacturing costs per remote control assuming an activity-based-costing method is used and a batch of 50 remote controls are produced? The batch requires 100 parts, 6 direct manufacturing labor hours, and 2.5 minutes of inspection time.

A. P6.55

B. P5.55

C. P4.55

D. P4.00

Reference no: EM133185379

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What is the indirect manufacturing costs per remote control

Reference no: EM133185379

Reference no: EM133185379

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