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ACC207 After Class Exercise – Chapter 5 Activity Based Costing

ACC207Afer Class Exercise – Chapter 5AcTvity Based CosTngName ______________________________________Due 02/11 by 9 AM.Afer class exercises are to be completed on anINDIVIDUAL BASIS!Ways tosubmit this are to slide it under my door (Webster 217) or email completed word Fle Not Sunscreen company is thinking about using AcTvity Based CosTng.±hey would like to comparethe simple system they are using with an ABC system.Burn Not produces two products, SP²30 andSP²45±he ³ollowing in³ormaTon relates to Burn Not.SP² 30SP² 45Units sold25,00035,000Selling Price$12.00$10.00Direct materials per unit$3.00$2.25Direct Labor cost per unit$1.40$1.50ProducTon runs2027Material moves5059Machine set ups1621Number o³ inspecTons1012Machine hours2,0003,000INDIREC± COS±S:AcTvityAcTvity costAcTvity cost driverProducTon scheduling$30,000ProducTon runsMaterial handling$25,000Material movesAssembly cost$165,000Machine hoursMachine set up$13,000Machine set upsInspecTon$50,000Number o³ inspecTonsUnder the Simple system, the Indirect costs were simply allocated to the product based onmachinehours1.How much is the indirect cost rate per machine hour._________________________2.Calculate the ±O±AL cost o³ the SP² 30 and SP²45 and the unit costunder a simple cost system.SP²30SP²45DM costDL cost²actory overhead±otal Cost/ units sold±otal Cost per unit

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