Two-Stage ABC for Manufacturing Columbus Foundry, a large manufacturer of heavy equipment components, has determined...
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Accounting
Two-Stage ABC for Manufacturing Columbus Foundry, a large manufacturer of heavy equipment components, has determined the following activity cost pools and cost driver levels for the year:
| Activity cost pool | Activity cost | Activity cost driver |
|---|---|---|
| Machine setup | $600,000 | 12,000 setup hours |
| Material handling | 120,000 | 2,000 tons of materials |
| Machine operation | 500,000 | 10,000 machine hours |
The following data are for the production of single batches of two products, C23 Cams and U2 Shafts:
| C23 Cams | U2 Shafts | |
|---|---|---|
| Units produced | 500 | 500 |
| Machine hours | 2 | 5 |
| Direct labor hours | 400 | 200 |
| Direct labor cost | $5,000 | $10,000 |
| Direct materials cost | $30,000 | $20,000 |
| Tons of materials | 12.5 | 8 |
| Setup hours | 4 | 9 |
Determine the unit costs of C23 Cams and U2 Shafts using ABC. C23 Cams $? U2 Shafts $?
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