90.2K

Verified Solution

Link Copied!

ABC Inc. produces a single product and manufactured 20.000 units and sold 10,000 units last year. ABC had a practical production capacity of 20,000 units per year. The company budgeted the following overhead costs for the year. Indirect Factory Wages: Factory Utilities: Factory Depreciation: $140,000 $ 40,000 $ 10,000 Direct manufacturing costs per unit are $40. The company uses an activity-based costing system which compiles costs into 3 cost pools, machining, milling and assembly. The costs allocated to these activity cost pools break down as follows: Usage: Cost: Indirect Factory Wages: Factory Utilities: Factory Depreciation: Iachining Hilling Assembly 50% 30% 20% 40% 40% 20% 10% 0% 90% The following cost drivers are used for each of the following activity cost pools: Machining: Machine Hours Milling: Milling Hours Assembly: Direct Labour Hours. Practical and expected capacity for each of the cost pools are shown below. Machining: 45,500 Machine Hours. Milling: 61,000 Milling Hours. Assembly: 19,000 Direct Labour Hours. Actual Usage was as follows: Machining: 20,000 Machine Hours. Milling: 80,000 Milling Hours. Assembly: 15,000 Direct Labour Hours. Each unit requires a budgeted 2 Machine Hours, 1 Milling Hour and 4 Direct Labour Hours. ABC's policy is to charge $84 per unit. Machining: 45,500 Machine Hours. Milling: 61,000 Milling Hours. Assembly: 19,000 Direct Labour Hours. Actual Usage was as follows: Machining: 20,000 Machine Hours Milling: 80,000 Milling Hours. Assembly: 15,000 Direct Labour Hours. Each unit requires a budgeted 2 Machine Hours, 1 Milling Hour and 4 Direct Labour Hours. ABC's policy is to charge $84 per unit. ABC's budgeted ending finished goods inventory (unadjusted) using activity based costing would be: Multiple Choice $150.000 $530,000 $500,000 $380.000

Answer & Explanation Solved by verified expert

See Answer