Activity Cost Driver Chosen as Allocation Base Conversion Cost Per Unit of Allocation Base Materials handling Number of parts $1.00 Machining Machine hours 60.00 Packaging Number of finished units 2.00

Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter8: Standard Cost Accounting—materials, Labor, And Factory Overhead
Section: Chapter Questions
Problem 10E: Standard unit cost and journal entries The normal capacity of Algonquin Adhesives Inc. is 40,000...
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Activity

Cost Driver Chosen as

Allocation Base
Conversion Cost Per Unit of

Allocation Base
Materials handling Number of parts $1.00
Machining Machine hours 60.00
Packaging Number of finished units 2.00

Each windsock requires three parts and spends five minutes in the machining department. The total cost of direct materials and direct labor is $3.50 per windsock. Gale produces 20,000 windsocks each year and sells them at 140% of cost.

 

The selling price per windsock is:






 

Question 8 options:

 

$13.50.

 

$18.90.

 

$16.10.

 

$88.20.

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