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Q. 19-6SE-2

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Horngren'S Financial And Managerial Accounting
Found in: Page 1065

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Short Answer

The following information is provided for Orbit Antenna Corp., which manufactures two products: Lo-Gain antennas and Hi-Gain antennas for use in remote areas.

Activity Cost Allocation Base

Setup $ 58,000 Number of setups

Machine maintenance 30,000 Number of machine hours

Total indirect manufacturing costs $ 88,000

Lo-Gain Hi-Gain Total

Direct labor hours 1,200 3,800 5,000

Number of setups 40 40 80

Number of machine hours 3,000 2,000 5,000

Orbit Antenna plans to produce 125 Lo-Gain antennas and 225 Hi-Gain antennas.

Requirements

2. Compute the ABC indirect manufacturing cost per unit for each product.

Per unit Indirect cost

For Lo-Gain: $376

For Hi-Gain: $182.22

See the step by step solution

Step by Step Solution

Calculation of predetermined overhead rate

Calculation of per unit indirect cost for Lo-Gain

Calculation of per unit indirect cost for Hi-Gain

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