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Q. 19-7SE

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

Short Answer

Jaunkas Corp. manufactures mid-fi and hi-fi stereo receivers. The following data have been summarized:

Mid-Fi Hi-Fi

Direct materials cost per unit $ 400 $ 1,800

Direct labor cost per unit 600 400

Indirect manufacturing cost per unit ? ?

Indirect manufacturing cost information includes the following:

Activity

Predetermined

Overhead

Allocation Rate

Mid-Fi

Hi-Fi

Setup

$ 1,400 per setup

36 setups

36 setups

Inspection

$ 700 per inspection hour

35 inspection hours

20 inspection hours

Machine maintenance

$ 13 per machine hour

1,900 machine hours

1,150 machine hours

The company plans to manufacture 125 units of the mid-fi receivers and 250 units of the hi-fi receivers. Calculate the product cost per unit for both products using activity-based costing.

Per unit indirect cost

For Mid-Fi: $796.8

For Hi-Fi: $317.4

See the step by step solution

Step by Step Solution

Per unit product cost for Mid-Fi

Per unit product cost for Hi-Fi

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