Answer:
Unitary cost= $133.30
Explanation:
Giving the following information:
Activity Cost Pool - Total Cost - Total Activity
Assembly - $846,040 - 52,000 machine-hours
Processing orders - $64,056 - 1,700 orders
Inspection - $102,408 - 1,360 inspection-hours
First, we need to calculate the estimated manufacturing overhead rate for each activity cost pool:
To calculate the estimated manufacturing overhead rate we need to use the following formula:
Estimated manufacturing overhead rate= total estimated overhead costs for the period/ total amount of allocation base
Assembly= 846,040/52,000= $16.27 per machine-hour
Processing= 64,056/1,700= $37.68 per order
Inspection= 102,408/1,360= $75.3 per inspection hour
Now, we can allocate overhead to product Q79Y:
Allocated MOH= Estimated manufacturing overhead rate* Actual amount of allocation base
Assembly=16.27*1,080= $17,571.6
Processing= 37.68*70= $2,637.6
Inspection= 75.3*20= $1,506
Total overhead= $21,715.2
Data concerning the company's product Q79Y appear below:
Annual unit production and sales 450
Direct materials cost $44.00 per unit
Direct labor cost $41.03 per unit
Finally, we calculate the unitary cost of product Q79Y:
Unitary cost= direct material + direct labor + allocated overhead
Unitary cost= 44 + 41.03 + (21,715.2/450)= $133.30
