Compute the per-unit cost for each product

Assignment Help Accounting Basics

Reference no: EM133975342

Problem

Allocating facility-level costs and a product elimination decision

Thornton Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow:

	Basco Boards	Shimano Boards
Production costs
Direct materials	$ 25.60	$ 39.20
Direct labor	$ 31.60	$ 54.20
Allocated overhead	$ 15.80	$ 21.20
Total units produced and sold	5,600	9,600
Total sales revenue	$ 515,200	$ 1,305,600

Thornton allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $62,000 per quarter, to the two products equally.

Task

Compute the per-unit cost for each product.

Reference no: EM133975342

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