Principles of Managerial Accounting Web Summer 2018 Test Exa

Principles of Managerial Accounting Web Summer 2018 Test: Exam 2 This Question: 1 pt Time Remaining 22 of 32 (9 complete) Th OP Technologies Manufacturing manufactures small parts and uses an activity -based costing system. Est. Indirect Activity Costs $83,000 $256,000 $90,000 Allocation base Cost allocation rate Material moves $5.00/move Direct labor hours $8.00/dir, labor hour # of finished units S2.00 finished unit Activity Assembling Packaging The following parts were produced in October with the following information Part # Produced 2.350 5.000 4.950 Materials Costs $2.800 $8.500 $7.000 700 1.600 2400 Dir. Labor Hrs. 350 425 1.700 Total unit costs for Part A is closest to (round to two decimal points OA $19.71 OB. S587 C. S6.53 OD. $5.98

Solution

Correct answer is option B.$5.87

Calculation of Total unit cost for Part A

Direct material cost $2800

Indirect material (700*5) $3500

Assembling charges (350*8) $2800

Packaging (2350*2) $4700

TOTAL $13800

Cost per unit = $13800/2350= $5.87