What is the total cost of lounge chairs for the year

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Q1. The Pinewood Furniture Company Pty Ltd plans to manufacture two lines of chairs in the coming year-lounge and patio. The company is considering introducing an activity-based costing system. Given below are each activity, its cost and its related activity driver.

Activity

Cost

Activity driver

Material Setup

300,000

No of setup

Material handling

250,000

No of Parts

Cutting

700,000

No of Parts

Assembly

600,000

DLH

Finishing

450,000

No of units

The level of activity for the year is:

 

Lounge

Patio

Units to Be produced

10000

5000

No of Setups

60

60

No of Parts per unit

10

5

DLH per unit

5

2

Under an activity-based costing system, what is the total cost of lounge chairs for the year? ( Kindly show the workings) 

Q2. The following information relates to Wells Fargo for July 2008:

Actual Direct Labor costs

80,000

Actual direct labor rate per hour

8

Factory Overhead rate per direct labor hour

12

Factory Overhead incurred

160,000

Assuming underapplied or overapplied overhead is transferred to cost of goods sold at the end of the period, what would be the entry to the cost of goods sold account? (Show all the workings).

Reference no: EM131700190

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