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 the period?
A) $80,675
B) $10,625
C) $32,100
D) $17,250

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 the period?
A) $80,675 
B) $10,625 
C) $32,100 
D) $17,250

Quizplus · Accepted Answer

100 x [(17 x $0.50) + (3 x $22) + (2.5 x $13) + $50 + $14] + (3 x $50) materials handling
= $17,250

Kratz Manufacturing Company Uses an Activity-Based Costing System