Drewniak Corporation has provided the following data from its activity-based costing system: The company makes 430 units of product O37W a year,requiring a total of 690 machine-hours,40 orders,and 10 inspection-hours per year.The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit. According to the activity-based costing system,the average cost of product O37W is closest to:
A)$94.11 per unit
B)$89.72 per unit
C)$65.18 per unit
D)$92.49 per unit

Question

Drewniak Corporation has provided the following data from its activity-based costing system:  The company makes 430 units of product O37W a year,requiring a total of 690 machine-hours,40 orders,and 10 inspection-hours per year.The product's direct materials cost is $35.72 per unit and its direct labor cost is $29.46 per unit. According to the activity-based costing system,the average cost of product O37W is closest to:
A)$94.11 per unit 
B)$89.72 per unit 
C)$65.18 per unit 
D)$92.49 per unit

Quizplus · Accepted Answer

The activity rates for each activity cost pool are computed as follows:
 11eaa48f_7b8e_dc70_9e4a_b7448b76dd9a_TB2485_00 The overhead cost charged to Product O37W is:
 11eaa48f_7b8f_0381_9e4a_4b38a908e851_TB2485_00 
 11eaa48f_7b8f_0382_9e4a_a9ab00684d51_TB2485_00 Cost per unit = $40,467.60 F1F1F1S1F1F1F10 430 units = $94.11 per unit

Drewniak Corporation Has Provided the Following Data from Its Activity-Based