3A Stage Two ABC for Manufacturing: Reassigning Costs to Cost Objectives National Technology, LTD. has developed the following activity cost information for its manufacturing activities: Activity Activity Cost Machine setup $60.00 per batch Movement 15.00 per batch 0.10 per pound Drilling 3.00 per hole Welding 4.00 per inch Shaping 25.00 per hour Assembly 18.00 per hour Inspection 2.00 per unit Filling an order for a batch of 50 fireplace inserts that weighed 100 pounds each required the following: * Four batch moves * Two sets of inspections * Drilling ten holes in each unit * Completing 100 inches of welds on each unit * Forty-five minutes of shaping for each unit * One hour of assembly per unit Required Determine the activity cost of converting the raw materials into 50 fireplace inserts.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.2E: Identify cost graphs The following cost graphs illustrate various types of cost behavior: For each...

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E5-3A	Stage Two ABC for Manufacturing: Reassigning Costs to Cost Objectives
	National Technology, LTD. has developed the following activity cost information for its manufacturing activities:

	Activity	Activity Cost
	Machine setup	$60.00 per batch
	Movement	15.00 per batch
		0.10 per pound
	Drilling	3.00 per hole
	Welding	4.00 per inch
	Shaping	25.00 per hour
	Assembly	18.00 per hour
	Inspection	2.00 per unit

	Filling an order for a batch of 50 fireplace inserts that weighed 100 pounds each required the following:
	* Four batch moves
	* Two sets of inspections
	* Drilling ten holes in each unit
	* Completing 100 inches of welds on each unit
	* Forty-five minutes of shaping for each unit
	* One hour of assembly per unit

	Required
	Determine the activity cost of converting the raw materials into 50 fireplace inserts.

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