Question

A company has two products: standard and deluxe. The company expects to produce 41,537 Standard units and 42,734 Deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools.

				Budgeted Activity of Cost Driver
	Budgeted OH Cost			Standard			Deluxe
Activity 1: Purchasing	$	93,000		2,500	Purchases		5,250	Purchases
Activity 2: Designing	$	92,000		4,500	Designs		5,500	Designs
Activity 3: Shipping	$	87,000		3,000	Orders		2,800	Orders

Required:

Make a Job Cost Sheet for the Standard Units. Use the following Direct Materials and Direct Labor information.

- Direct Materials $5,136

- Direct Labor $5,139

For Overhead, computer overhead rates for each of the three activities. Hint, you will divide each activity's budgeted cost by the TOTAL amount of that activity's cost driver. So you will need to add Purchases for Standard and Deluxe to get the total denominator for that activity. (Round activity rate and cost per unit answers to 2 decimal places.)

Your Job Cost Sheet will include:

Direct Materials

+ Direct Labor

+ Overhead for Purchasing

+ Overhead for Designing

+ Overhead for Shipping

= Total Job Cost

/ Units Produced

= Per Unit Cost

The answer you type in will be the Per Unit Cost of the Standard Units. Round your answer to the nearest 2 decimal places.

Answer 1

	A			B	A/B
	Budgeted
	OH Cost $	Standard	Deluxe	Total Activity	Activity rate $
Activity 1: Purchasing	93,000	2,500	5,250	7,750	12.00
Activity 2: Designing	92,000	4,500	5,500	10,000	9.20
Activity 3: Shipping	87,000	3,000	2,800	5,800	15.00
Standard
Direct Materials	5,136
+ Direct Labor	5,139
+ Overhead for Purchasing	30,000	=2500*12
+ Overhead for Designing	41,400	=4500*9.2
+ Overhead for Shipping	45,000	=3000*15
Total Job Cost $	126,675
/ Units Produced	41,537
Per Unit Cost $	3.05