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ABC Inc. manufactures hockey sticks and wooden tops. Currently, ABC makes 5,000 hockey sticks each month. Each stick uses $1.00 in direct materials and $0.50 in direct labor. ABC uses two activities in manufacturing the hockey sticks: Cutting and Finishing. The cost associated with Cutting is $7,500 a month, allocated on the basis of direct labor hours. The cost associated with Finishing is $12,500 a month, allocated on the basis of batches.
The activity drivers are used as follows:
Hockey sticks Wooden tops Direct labor hours 100 200 Batches 4 6
Problem 1: What is the total manufacturing cost for one hockey stick?
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