Question

Traditions Home Accessories Company manufactures decorative lamps using an activity-based costing system to allocate all manufacturing conversion costs. The following information is provided for the month of June: Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base Materials handling $3,000 Number of parts 6,000 parts Assembling $7,200 Number of hours 3,000 hours Packaging $4,000 Number of lamps 2,000 lamps Four lamps can be assembled in 1 hour. Each lamp consists of 9 parts. The total direct materials cost per lamp is $8.00. What is the total manufacturing cost per lamp

Answer 1

Answer:

$15.10 per lamp

Explanation:

Cost per part of Material handling = $3000/6000 parts

Cost per part of Material handling = $0.50 per part

Assembling per hour = $7200/3000

Assembling per hour = $2.40 per hour

Packaging per lamp = $4000/2000

Packaging per lamp = $2 per lamp

Total manufacturing cost per Lamp = $8 + (9*$0.50) + ($2.40/4) + $2

Total manufacturing cost per Lamp = $8 + $4.5 + $0.6 + $2

Total manufacturing cost per Lamp = $15.10 per lamp