Question

Activity-Based Costing and Conventional Costs Compared

Cuisinart, a Conair Corporation, manufactures outdoor gas cookers and charcoal smokers. Assume that Cuisinart only makes a single model of each product and that the following information pertains to the total manufacturing costs for the products in the current month.

	Gas Cooker	Charcoal Smoker
Units	4,000	3,500
Number of batches	80	35
Number of machine hours	16,000	3,000
Direct materials	$ 225,500	$ 108,500
Direct labor	$ 100,683	$ 50,341

Manufacturing overhead follows:

Activity	Cost	Cost Driver
Materials acquisition and inspection	$ 50,100	Amount of direct materials cost
Production assembly	123,500	Numbers of machine hours
Scheduling	15,180	Number of batches
	$ 188,780

Rounding instructions: Do not round until your final answers. Round total cost answers to the nearest dollar and per unit answers to the nearest cent.

(a) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming all manufacturing overhead related to these two products assigned on the basis of direct labor dollars.

Total cost	Answer
Gas Cooker	Answer	per unit
Charcoal Smoker	Answer	per unit

(b) Determine the total and per-unit costs of manufacturing the Gas Cooker and Charcoal Smoker for the month, assuming manufacturing overhead is assigned using activity-based costing.

Total cost	Answer
Gas Cooker	Answer	per unit
Charcoal Smoker	Answer	per unit

Answer 1