Question

Activity-Based Costing and Conventional Costs Compared
Chef Grill Company manufactures two types of cooking grills: the Gas Cooker and the Charcoal Smoker. The Cooker is a premium product sold in upscale outdoor shops; the Smoker is sold in major discount stores. Following is information pertaining to the manufacturing costs for the current month.

	Gas Cooker	Charcoal Smoker
Units	1,000	3,000
Number of batches	50	10
Number of batch moves	80	20
Direct materials	$50,000	$100,000
Direct labor	$20,000	$21,000

Manufacturing overhead follows:

Activity	Cost	Cost Driver
Materials acquisition and inspection	$315,000	Amount of direct materials cost
Materials movement	16,300	Number of batch moves
Scheduling	36,000	Number of batches
	$367,300

Answer 1