Hang Ten Company manufactures surf boards and uses an activityminusbased costing system to allocate all manufacturing conversion costs. Each surf board consists of 30 separate parts totaling $ 155 in direct materials, and requires 3 hours of machine time to produce. The company incurs no direct labor costs. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $ 3.75 per part Machining Machine hours $ 2.00 per machine hour Assembling Number of parts $ 1.50 per part Packaging Number of finished units $ 2.75 per finished unit What is the total manufacturing cost per surf board?

Question

Augustus Nichols

Business

13 February, 21:04

Hang Ten Company manufactures surf boards and uses an activityminusbased costing system to allocate all manufacturing conversion costs. Each surf board consists of 30 separate parts totaling $ 155 in direct materials, and requires 3 hours of machine time to produce. The company incurs no direct labor costs. Additional information follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $ 3.75 per part Machining Machine hours $ 2.00 per machine hour Assembling Number of parts $ 1.50 per part Packaging Number of finished units $ 2.75 per finished unit What is the total manufacturing cost per surf board?

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Tatiana Pennington · Answer 1

Total = $ 321.25

Explanation:

Giving the following information:

Each surfboard consists of 30 separate parts totaling $ 155 direct materials and requires 3 hours of machine time to produce.

Materials handling: Number of parts $ 3.75 per part

Machining: Machine hours $ 2.00 per machine hour

Assembling: Number of parts $ 1.50 per part

Packaging: Number of finished units $ 2.75 per finished unit

Total manufacturing cost:

Direct materials = 155

Materials handling=$ 3.75 * 30 = $112.5

Machining: $ 2.00*3 = 6

Assembling: $ 1.50*30 = 45

Packaging: $ 2.75

Total = $ 321.25