Question - What is the manufacturing overhead costs for each part using activity- based costing, assuming each of the five cost pools represents a separate activity pool. Use the most appropriate activity driver for assigning activity costs to the two products.
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Part A
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Part B
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Production Units
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100,000
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21,000
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Selling Price
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$58
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$46
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Overhead per unit(base on DL hours)
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$12.82
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$6.10
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Materials and direct labor cost per unit
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$17.06
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$12.52
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Number of production runs
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20
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40
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Number of purchasing and receiving orders processed
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80
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200
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Number of machine hours
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25,500
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12,000
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Number of direct labor hours
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50,000
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5,000
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Number of engineering hours
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10,000
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10,000
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Number of material moves
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100
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80
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Outdoor Adventure has monthly overhead of(just manufacturing) of $1,410,000, divided into the activities below
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Setup costs
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$60,000
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Machine costs
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350,000
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Purchasing and Receiving costs
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420,000
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Engineering Costs
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400,000
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Materials handling cost.
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180,000
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Total
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$1,410,000
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