Solution-What is the per unit cost for manufacturing

What is the per unit cost for manufacturing overhead

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Reference no: EM132488682

Question - Bird's Eye View manufactures three different sizes of bird cages: small (for finches and canaries), medium (for cockatiels and small parrots), and large (for cockatoos and other large parrots). The company has recently implemented an activity-based costing system. Bird's Eye View has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year.

Activity	Cost Driver	Budgeted Costs
Materials handling	Labor hours	$55,000
Automated processing	Machine hours	40,000
Plastic parts insertion	Number of parts	6,000
Inspections	Labor hours	29,000
Packaging	Orders shipped	31,000
Total indirect manufacturing cost		$161,000

The following information relates to each size of bird cage and next year's anticipated manufacturing operations:

	Large	Medium	Small
Units to be produced	350	400	600
Orders to be shipped	180	200	250
Number of parts per unit	8	6	4
Machine hours per unit	4	2	1
Labor hours per unit	2	2	2

Under an activity-based costing system, what is the per unit cost for manufacturing overhead of a SMALL cage (rounded)?

A) $120

B) $151

C) $136

D) $100

Reference no: EM132488682

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What is the per unit cost for manufacturing overhead

Reference no: EM132488682

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