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Larner Corporation is a diversified manufacturer of industrial goods. The company's activity-based costing system contains the following...

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Accounting

Larner Corporation is adiversified manufacturer of industrial goods. The company'sactivity-based costing system contains the following six activitycost pools and activity rates:

  

  Activity CostPool        Activity Rates
  Labor-related$5.00per direct labor-hour
  Machine-related$6.00per machine-hour
  Machine setups$40.00per setup
  Productionorders$100.00per order
  Shipments$120.00per shipment
  General factory$6.00per direct labor-hour

  

Cost and activity data have beensupplied for the following products:

  

J78B52
  Directmaterials cost per unit$6.00   $26.00      
  Direct labor costper unit$5.00  $6.00     
  Number of unitsproduced per year1,000     100     
Total Expected Activity
  
J78B52
  Directlabor-hours1,30040
  Machine-hours2,20030
  Machine setups52
  Productionorders72
  Shipments62
Required:
Compute the unit product cost ofeach product listed above. (Round your answers to 2 decimalplaces.)


Answer & Explanation Solved by verified expert
3.9 Ratings (612 Votes)

J78 B52
Direct materials $ 6.00 $    26.00
Direct labor $ 5.00 $       6.00
Overheads $ 29.12 $    11.40
Unit product cost $ $ 40.12 $    43.40
Activity Cost Pool Activity Rates J78 B52
Activity Cost Activity Cost
Labor related $ 5.00 1300 $   6,500.00 40 $     200.00
Machine related $ 6.00 2200 $ 13,200.00 30 $     180.00
Machine setups $ 40.00 5 $       200.00 2 $       80.00
Production orders $           100.00 7 $       700.00 2 $     200.00
Shipments $           120.00 6 $       720.00 2 $     240.00
General factory $ 6.00 1300 $   7,800.00 40 $     240.00
Total cost $ 29,120.00 $ 1,140.00
Number of units produced 1000 100
Overhead per unit $         29.12 $       11.40

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