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4-23 Traditional activity-based costs

4-23 Traditional activity-based costs
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MANAGEMENT ACCOUNTING
Management Accounting (Atkinson), 5th Edition
4-23 (Traditional activity-based costs) VG Company has identified the following cost pools and cost drivers

COST POOLS ACTIVITY COSTS COST DRIVERS

Machine setup $360,000 6,000 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

ITEM V203 G179

Number of units produced 5,000 15,000

Direct materials cost $25,000 $33,000

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

Determine the unit cost for each of the two products using activity-based costing.

 

FILE: MS WORD

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