Question: VG Company has identified the following cost pools and cost drivers:
|
COST POOLS
|
ACTIVITY COST
|
COST DRIVERS
|
|
Machine Setup
|
$360,000
|
6000 setup hours
|
|
Materials Handling
|
$100,000
|
50,000 pounds of material
|
|
Electric Power
|
$40,000
|
80,000 kilowatt hours
|
The following information pertains to the production of V203 and G179:
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ITEMS
|
V203
|
G179
|
|
Number of units produced
|
5,000
|
15,000
|
|
Direct Materials Cost
|
$25,000
|
$33000
|
|
Direct Labor Cost
|
$14,000
|
$16,000
|
|
Number of Setup Hours
|
120
|
150
|
|
Pounds of Material Used
|
5,000
|
10,000
|
|
Kilowatt Hours
|
2,000
|
3,000
|
Calculate the unit cost for every of the two products using activity based costing.