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
E)$64.99 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 
E)$64.99 per unit

Quizplus · Accepted Answer

The activity rates for each activity cost pool are computed as follows: 11ea7277_ef19_c6fa_9608_05b5d8448f16_TB2411_00 The overhead cost charged to Product O37W is: 11ea7277_ef19_ee0b_9608_5b18f52b6d08_TB2411_00 11ea7277_ef19_ee0c_9608_791f075ab6d0_TB2411_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