Use the information below to answer the following question(s):
Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

-What is the total manufacturing cost per cuckoo clock?
A) $142.50
B) $24.00
C) $144.00
D) $25.00

Question

Use the information below to answer the following question(s):
Pittinger Company manufactures cuckoo clocks and uses an activity-based costing system. Each cuckoo clock consists of 10 separate parts totaling $120 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:
 
-What is the total manufacturing cost per cuckoo clock?
A) $142.50 
B) $24.00 
C) $144.00 
D) $25.00

Quizplus · Accepted Answer

The total manufacturing cost per cuckoo clock is calculated by adding the direct materials cost, direct labor cost, and manufacturing overhead cost. 
Direct materials cost per cuckoo clock = $120 
Direct labor cost per cuckoo clock = 2.0 hours x $18 per hour = $36 
Manufacturing overhead cost per cuckoo clock = $84 (calculated as $12 per machine hour x 2.0 machine hours per cuckoo clock) 
Total manufacturing cost per cuckoo clock = $120 + $36 + $84 = $240 / 10 cuckoo clock parts = $24 per cuckoo clock. 
Therefore, the answer is C.

Use the Information Below to Answer the Following Question(s)