Business, 12.12.2019 01:31 jazz9876

Overhead cost drivers: determination and use of unit cost

during june, assembly department no. 4 of hot tech produced 15,000 model 201 computer keyboards. assembly of these
units required 1,875 hours of direct labor at a cost of $45,000. direct materials costing 5121.000, and 400 hours of machine
time. based on an analysis of overhead costs at the beginning of the year, overhead is applied to keyboards using the
following formula:

overhead = 120% of dlrect labor cost + $350 per machlne hour

3. compute the total amount of overhead cost applied to the 15.000 keyboards.

b. compute the per-unit cost of manufacturing these keyboards.

c. briefly explain whythe department might use two separate activity bases in applying overhead costs to one type of
product

d. identify at least two types of overhead cost pools that might be "driven" by each of the two cost drivers indicated in this
situation.

e. what appears to be the pﬁma/ydriver of overhead costs in the manufacture of keyboards?

f. compute the gross profit that will result from the sale of 4.000 of these keyboards at a sales price of $40 each.

Answers: 1

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Overhead cost drivers: determination and use of unit cost

during june, assembly departm...