Kratz Manufacturing Company uses an activity-based costing system. It has the following manufacturing activity areas, related cost drivers and cost allocation rates:
During the month, 100 units were produced, with no defects, requiring three setups. Each unit consisted of 17 parts, 3 direct labor hours and 2.5 machine hours. Direct materials cost $50 per finished unit.
-What is the total manufacturing cost for inspections?
A) $1,100
B) $1,400
C) $ 900
D) $ 700

Question

Kratz Manufacturing Company uses an activity-based costing system. It has the following manufacturing activity areas, related cost drivers and cost allocation rates:
  During the month, 100 units were produced, with no defects, requiring three setups. Each unit consisted of 17 parts, 3 direct labor hours and 2.5 machine hours. Direct materials cost $50 per finished unit.
-What is the total manufacturing cost for inspections?
A) $1,100 
B) $1,400 
C) $ 900 
D) $ 700

Quizplus · Accepted Answer

100 x $14 = $1,400

Kratz Manufacturing Company Uses an Activity-Based Costing System