Ask Question
BusinessBusiness
21 May, 17:26

Hadley, Inc. manufactures a product that uses $18 in direct materials and $5 in direct labor per unit. Under the traditional costing system Hadley uses, manufacturing overhead applied to each unit is $13. However, Hadley is considering switching to an ABC system. Under the ABC system, the total activity cost would be $30. What is the total manufacturing cost per unit for Hadley under the ABC system

+2
Answers (1)
  1. 21 May, 17:42
    0
    Total Manufacturing cost per unit is $53

    Explanation:

    Manufacturing cost is the cost used to manufacture a product, both direct and indirect cost incurred in manufacturing process are included. It is the total value of material cost, labor cost and overhead cost.

    Direct Material Cost = $18

    Direct Labor cost = $5 per hour

    Manufacturing overhead applied = $13 per unit

    Total Activity rate = $30

    Activity based costing is the method of allocation of overhead to the products / department / projects on the basis of uses of activity by each one. As we know that calculating an activity rate which is similar to predetermined overhead rate.

    Total Manufacturing Cost = Direct material cost + Direct Labor cost + Manufacturing overhead cost

    As we know that calculating an activity rate which is similar to predetermined overhead rate. so the activity rate will be used for overhead expense.

    Total Manufacturing Cost = $18 + $5 + $30 = $53 per unit
Know the Answer?
Not Sure About the Answer?
Find an answer to your question 👍 “Hadley, Inc. manufactures a product that uses $18 in direct materials and $5 in direct labor per unit. Under the traditional costing system ...” in 📗 Business if the answers seem to be not correct or there’s no answer. Try a smart search to find answers to similar questions.
Search for Other Answers
You Might be Interested in
A gold ring selling for $1845 is reduced by 30% after Valentine's Day. Find the reduced price of the ring. To find a price after mark down, multiply the original price by (1 - R).
Answers (1)
You expect General Motors (GM) to have a beta of 1.5 over the next year, and the beta of Exxon Mobil (XOM) to be 1 over the next year. Also, you expect the volatility (i. e.
Answers (1)
Scott defines "minority owned" in his study of businesses in Northeastern City as being those businesses that are currently owned by women or African Americans. What has he done?
Answers (1)
Wildhorse Co. acquires land for $80000 cash. Additional costs are as follows. Removal of shed $700 Filling and grading 1200 Salvage value of lumber of shed 190 Broker commission 1200 Paving of parking lot 10000 Closing costs 600 Wildhorse will
Answers (1)
Phan Company has not reported a profit in five years. This year the company would like to narrow its loss to $7,500. Assuming its selling price is $36.
Answers (1)
New Questions in Business
Nichols Corporation's value of operations is equal to $600 million after a recapitalization (the firm had no debt before the recap). It raised $150 million in new debt and used this to buy back stock.
Answers (1)
A decedent owned 300 shares of closely held xyz stock jointly with her brother. this property must be reported on
Answers (1)
What is the document that the marketing researcher pledges to deliver as a result of the marketing research process?
Answers (1)
10.3. Gadgets are produced and sold in a competitive market. When there is no tax, the equilibrium price is $20 per gadget. The own-price elasticity of demand for gadgets is 0.5.
Answers (1)
The specific identification inventory method should be used when the inventory consists of identical, low-cost units that are purchased and sold frequently. True False
Answers (1)
Home » Business » Hadley, Inc. manufactures a product that uses $18 in direct materials and $5 in direct labor per unit. Under the traditional costing system Hadley uses, manufacturing overhead applied to each unit is $13.
Sign Up Forgot Password?