Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division.

The following units were produced in December with the following information:

Total unit costs for Part 001 is closest to (round to two decimal points)
A)$5.70.
B)$14.84.
C)$9.37.
D)$5.36.

Question

Beartowne Enterprises uses an activity-based costing system to assign costs in its auto-parts division.

The following units were produced in December with the following information:

Total unit costs for Part 001 is closest to (round to two decimal points)
A)$5.70. 
B)$14.84. 
C)$9.37. 
D)$5.36.

Quizplus · Accepted Answer

A)
Part 001 # Produced Cost/part
Materials costs = $2,500
Overhead
Materials 100 moves × $5 = 500
Assembling 200 hours × $5 = 1,000
Packaging 1,250 units × $2.50 = 3,125
Total = $7,125 / 1,250 = 5.70

Beartowne Enterprises Uses an Activity-Based Costing System to Assign Costs