Homework SoursePlaid Manufacturing Co produces two products G1 and M1 The c
Plaid Manufacturing Co. produces two products: G1 and M1. The company uses an activity based costing system. The following are the activities, budgeted total cost and cost drivers per activity for the year 20x9:
Activity
Budgeted Cost
Cost Base
Cost Base Volume
Assembly
$878375
# of DL hours
35836
Inspection
$650181
# of units
22538
Shipping
$321938
# of batches
199
Budgeted data relating to the production of M1 for 20x9 is given below:
Number of units
1500
Units per batch
75
Direct labour hours (@ $18 per hour)
18001 hours
Direct materials (@ $13.12 per kg.)
888 kg.
What is the total cost of producing M1 in 20x9?
Select one:
a. $852518
b. $528500
c. $941496
d. $516850
| Activity | Budgeted Cost | Cost Base | Cost Base Volume |
| Assembly | $878375 | # of DL hours | 35836 |
| Inspection | $650181 | # of units | 22538 |
| Shipping | $321938 | # of batches | 199 |
Solution
Option d. $516850 is correct answer.
| Plaid Manufacturing Co. | |
| Total cost of producing M1 in 20x9 | |
| Particulars | Amount |
| Direct materials ($650181 x 1500 / 22538) | $43,272 |
| Direct labour ($878375 x 18001 / 35836) | $441,222 |
| Shipping Costs {($321938/199) x (1500/75)} | $32,356 |
| Total cost of producing M1 in 20x9 | $516,850 |
