Pima,Inc.manufactures calculators that sell for $40 each.Each calculator uses $15 in direct materials and $5 in direct labor per unit.Pima has two activities: Machining,which is applied at the rate of $4 per machine hour,and Finishing,which is applied at the rate of $20 per batch.This month,Pima made 400 calculators,using 1,000 machine hours in 40 batches.What is the total manufacturing cost for one calculator?
A)$20
B)$25
C)$27
D)$32

Question

Quizplus · Accepted Answer

The total manufacturing cost per calculator includes direct materials, direct labor, and both machining and finishing costs. Direct materials are $15, and direct labor is $5 per unit. Machining costs are $4,000 (1,000 hours * $4) and finishing costs are $800 (40 batches * $20), totaling $4,800. These costs, divided by 400 calculators, add $12 per calculator. Thus, the total cost per calculator is $15 + $5 + $12 = $32.

Pima,IncManufactures Calculators That Sell for $40 Each