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What is the cost of machining per ceiling fan

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Question - Brannon Company manufactures ceiling fans and uses the activity-based costing system. Each ceiling fan consists of 20 separate parts totaling $95 in direct materials, and requires 2.5 hours of machine time to produce. Additional information:

Activity                          Allocation Base                                Cost Allocation Rate

Materials handling           Number of parts                              $.08

Machining                       Machine hours                                 $7.20

Assembling                     Number of parts                              $.35

Packaging                       Number of finished units                  $2.70

a. What is the cost of materials handling per ceiling fan?

b. What is the cost of machining per ceiling fan?

c. Compare and contrast the ABC costing to more traditional costing methods. What are the main benefits of ABC?

Reference no: EM131810269

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