Business, 05.11.2021 01:30 phancharamachasm
Jamesway Corporation makes two types of replacement fittings for heavy construction equipment—screws and bolts. Data regarding the two products follow:
Direct Labour-Hours per Unit Annual Production
Screws 0.20 40,000 units
Bolts 0.10 60,000 units
Additional information about the company follows:
a. Screws require $8 in direct materials per unit, and bolts require $6.
b. The direct labour wage rate is $20 per hour.
c. Screws are more complex to manufacture than bolts, and they require special equipment.
d. The ABC system has the following activity cost pools:
Activity Cost Pool Activity Measure Estimated Overhead Cost Activity
Screws Bolts Total
Machine setups Number of setups $ 18,000 80 40 120
Special processing Machine-hours $ 160,000 4,000 0 4,000
General factory Direct labour-hours $ 210,000 7,000 14,000 21,000
Required:
1. Compute the activity rate for each activity cost pool.
2. Determine the unit cost of each product according to the ABC system, including direct materials and direct labour. (Round your answers to 2 decimal places.)
Answers: 1
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Jamesway Corporation makes two types of replacement fittings for heavy construction equipment—screws...
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