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Author Question: Conquest Machining Ltd. is a manufacturer of precision hand tools, is concerned with the apparent ... (Read 85 times)

mspears3

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Conquest Machining Ltd. is a manufacturer of precision hand tools, is concerned with the apparent lack of controls over cost incurrence in its Pliers Division. The division has always used a plant-wide rate for allocating manufacturing overhead to its products. However, some products cost substantially more than competitors retail prices while others are substantially less. The division manager believes that a better cost allocation method can be developed.

With the assistance of a plant supervisor, the accounting department has been able to establish the following relationships between production activities and the indirect costs of the activities:

ActivityCost DriverAllocation Rate
Material handlingNumber of parts$2.60 per part
Machine stampingMachine hours$60.00 per hour
Finishing Time Finishing minutes$4.00 per minute

The traditional allocation method is based upon direct manufacturing labour hours, and if that method is used the rate is $28 per hour.

Required:
Compute the unit indirect manufacturing costs of a batch of 200 tools if the batch required 220 parts, 8 machine hours, 52 minutes of finishing time, and 46 direct labour hours:


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Marked as best answer by mspears3 on Jan 4, 2020

Mholman93

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mspears3

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Reply 2 on: Jan 4, 2020
Thanks for the timely response, appreciate it


upturnedfurball

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Reply 3 on: Yesterday
Gracias!

 

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