Question

Belsky Corporation has provided the following data from its activity-based costing system: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembly $ 974,440 68,000 machine-hours Processing orders $ 95,300 2,000 orders Inspection $ 133,000 1,900 inspection-hours The company makes 450 units of product Q19S a year, requiring a total of 710 machine-hours, 42 orders, and 12 inspection-hours per year. The product's direct materials cost is $35.79 per unit and its direct labor cost is $29.53 per unit. According to the activity-based costing system, the unit product cost of product Q19S is closest to: (Round your intermediate calculations to 2 decimal places.)

Answer 1

Answer:

Unitary cost= $94.24

Explanation:

First, we need to calculate the predetermined overhead rate for each department:

Predetermined manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base

Assembly=  974,440/68,000= $14.33 per machine-hour

Processing=  95,300/2,000= $47.65 per order

Inspection= 133,000/1,900= $70 per inspection

Now, we can allocate overhead:

Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base

Assembly= 14.33*710= $10,174.3

Processing= 47.65*42= $2,001.3

Inspection= 70*12= $840

Total overhead= $13,015.6

Unitary overhead= 13,015.6/450= $28.92

Finally, the unitary cost:

Unitary cost= 35.79 + 29.53 + 28.92

Unitary cost= $94.24