18 Coudriet Manufacturing Corporation has a traditional manu

18. Coudriet Manufacturing Corporation has a traditional manufacturing overhead to its products using a predetermined overhead rate based on direct labor-hours (DLHs). The company has two products, P93S and N40S, about which it has provided the following data: P93S N40S Direct materials per unit Direct labor per unit Direct labor-hours per unit Annual production (units) S 21.90 54.80 S 8.80 S13.20 1.20 35,000 15,000 0.80 The company\'s estimated total manufacturing overhead for the year is $2,172,580 and the company\'s estimated total direct labor-hours for the year is 46,000 The company is considering using a variation of activity-based costing to determine its unit product costs for external reports. Data for this proposed activity-based costing system appear below: Estimated Activities and Activity Measures Direct labor support (DLHs) Setting up machines (setups) Part administration (part types) Total Overhead Cost S 552,000 419,980 1,200,600 S 2,172,580 P93s N40S Total DLHs Setups Part types 28,000 2,162 1,886 18,000 1,656 2,116 46,000 3,818 4,002 The unit product cost of product N40S under the activity-based costing system is closest to: A) $68.00 B) $68.86 C) $124.68 D) $136.86

Solution

Overhead 1032960 / 15000 = 68.864

Answer is (D) 136.86

Activity	total cost	total driver	rate	per driver
Direct labour and support	552000	46000	12	Dlh
Setting up machine	419980	3818	110	set up
Part administration	1200600	4002	300	part type