Answer:
Larner Corporation
Unit cost of J78 B52
$17.72 $52.30
Explanation:
a) Data and Calculations:
Activity Cost Pool Activity Rates
Labor-related $9.00 per direct labor-hour
Machine-related $7.00 per machine-hour
Machine setups $60.00 per setup
Production orders $200.00 per order
Shipments $100.00 per shipment
General factory $7.00 per direct labor-hour
b) Cost and activity data have been supplied for the following products:
J78 B52
Unit Total Unit Total
Direct materials cost per unit $3.00 $12,000 $36.00 $7,200
Direct labor cost per unit $5.00 $20,000 $7.00 $1,400
Manufacturing overhead costs $38,880 $1,860
c) Total manufacturing costs $70,880 $10,460
Number of units produced per year 4,000 200
d) Unit cost $17.72 $52.30
e) Total Expected Activity and Costs:
J78 B52
Unit Total Unit Total
Direct labor-hours 800 $7,200 40 $360
Machine-hours 3,300 23,100 20 140
Machine setups 3 180 3 180
Production orders 8 1,600 3 600
Shipments 12 1,200 3 300
General factory 800 5,600 40 280
Total overhead $38,880 $1,860
