What is the per unit cost for manufacturing overhead

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Reference no: EM132509587

Bird's Eye View manufactures three different sizes of bird cages: small (for finches and canaries), medium (for cockatiels and small parrots), and large (for cockatoos and other large parrots). The company has recently implemented an activity-based costing system. Bird's Eye View has identified five different production activities as well as the best cost driver for each activity. Each activity and driver is listed below, along with the budgeted amount that is associated with each activity for next year.

Budgeted

Activity Cost Driver                                          Costs

Materials handling Labor hours                        $ 55,000

Automated processing Machine hours                 40,000

Plastic parts insertion Number of parts                 6,000

Inspections Labor hours                                29,000

Packaging Orders shipped                                   31,000

Total indirect manufacturing cost                     $161,000

  • The following information relates to each size of bird cage and next year's anticipated manufacturing operations:

                                                       Large              Medium                         Small

Units to be produced                  350                  400                        600

Orders to be shipped                     180              200                         250

Number of parts per unit                    8                6                            4

Machine hours per unit                       4                2                           1

Labor hours per unit                           2               2                         2

Question 1: Under an activity-based costing system, what is the per unit cost for manufacturing overhead of a MEDIUM cage (rounded)?

$100
$136
$120
$151

Reference no: EM132509587

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