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Question - What is the manufacturing overhead costs for each part using activity- based costing, assuming each of the five cost pools represents a separate activity pool. Use the most appropriate activity driver for assigning activity costs to the two products.
Part A
Part B
Production Units
100,000
21,000
Selling Price
$58
$46
Overhead per unit(base on DL hours)
$12.82
$6.10
Materials and direct labor cost per unit
$17.06
$12.52
Number of production runs
20
40
Number of purchasing and receiving orders processed
80
200
Number of machine hours
25,500
12,000
Number of direct labor hours
50,000
5,000
Number of engineering hours
10,000
Number of material moves
100
Outdoor Adventure has monthly overhead of(just manufacturing) of $1,410,000, divided into the activities below
Setup costs
$60,000
Machine costs
350,000
Purchasing and Receiving costs
420,000
Engineering Costs
400,000
Materials handling cost.
180,000
Total
$1,410,000
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