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How do calculate the unit cost for each product

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Reference no: EM132609805

Tomas Sankara Company has identified the following overhead cost pools and cost drivers:

Cost Pools                   Activity Costs                Cost Driver                         Driver Consumption

Machine setup                $360,000                     Setup hours                       3,000

Materials handling             $100,000                     Pounds of materials            25,000

Electric power                        $40,000                      Kilowatt-hours                 40,000

The following cost information pertains to the production of two of its products, A and B:

                                                                         A                                 B

Number of units produced                        4,000                    20,000

Direct materials cost                                 $40,000                 $50,000

Direct labor cost                                         $24,000                $40,000

Number of setup hours                                      200                      240

Pounds of materials used                                     1000                     3000

Kilowatt-hours                                                        2,000                 4,000

Required:

Question 1: Use activity-based costing to calculate the unit cost for each product.

Reference no: EM132609805

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