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20 November, 14:15

True Blue Corporation provided the data set forth above from its activity-based costing system. The company makes 430 units of product D28K a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.82 per unit and its direct labor cost is $29.56 per unit. What is the unit product cost of product D28K?

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Answers (2)
  1. 20 November, 14:20
    0
    The unit product cost of product D28K is $94.49

    Step by Step Explanation:

    Activities and Activity Rates * ExpectedActivity

    Assembly ($14.35 per machine-hour) x 690 = $9,901.50

    Processing orders ($47.85 per order) * 40 = $1,914.00

    Inspection ($70.30 per inspection-hour) * 10 = $703.00

    Therefore:

    Total overhead costs assigned=

    $9,901.50 + $1,914.00 + $703.00 = $12,518.50

    Number of units produced

    $12,518.50/430 = $29.11

    Overhead cost per unit$ 29.11

    Unit product cost = Direct materials + Direct labor + Overhead

    Unit product cost = $35.82 + $29.56 + $29.11 = $94.49
  2. 20 November, 14:24
    0
    The unit Prodcut Cost of Product D28K = $94.49

    Explanation:

    First, the question is incmplete, the complete question is as follows:

    Knowledge Check 01 Activities

    Activity Rates Assembly $ 14.35 per machine-hour

    Processing Orders $ 47.85 per order

    inspection $ 70.30 per inspection-hour

    True Blue Corporation provided the data set forth above from its activity-based costing system. The company makes 430 units of product D28K a year, requiring a total of 690 machine-hours, 40 orders, and 10 inspection-hours per year. The product's direct materials cost is $35.82 per unit and its direct labor cost is $29.56 per unit. What is the unit product cost of product D28K? What is the unit product cost of product D28K?

    Solution

    The question is to determine the Unit Product Cost as follows:

    S/N Description Calculation Amount

    1. Direct Materials Cost $35.82 x 430 Units $15,402.60

    2. Direct Labour Costs $29.56 x 430 Units $12,710.80

    3. Assembly Cost $14.35 x 690 hours $9,901.50

    4. Processing Order Cost $47.85 x 40 orders $1,914

    5. Inspection Cost $70.3 x 10 hours $703

    6. Total Cost (Sum of all costs above) $40,631.90

    Based on these calculations, we calculate or compute the Unit Product cost as follows:

    Total Cost / The Number of Units Manufactured 430 Units

    = $40,631.9 / 430 units = $94.49

    The unit Prodcut Cost of Product D28K = $94.49
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