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No need to show working. Due Co. manufactures two bicycles, the Mountain Bike and the Street Racer,...

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Accounting

No need to show working.

Due Co. manufactures two bicycles, the Mountain Bike and theStreet Racer, and anticipates producing 8,000 Mountain Bikes and4,000 Street Racers.

The direct material cost and direct labor cost for each bikeare:

                       

Direct Materials

Direct Labor

Mountain Bike

$120

$240

Street Racer

$60

$160

Due’s budgeted overhead cost of $2,140,000 is based on thefollowing:

  • Set-upprocedures                    $   400,000
  • Assembling stations       $1,200,000
  • Finishing                     $   240,000
  • Shipping                      $   300,000

The following activities are needed to manufacture thebikes:

Set-up Procedures

Assembling Stations

Finishing

Shipping

Mountain Bike

6,000

12,000

8,000

4,000

Street Racer

4,000

8,000

4,000

2,000

For Questions 32 – 35, assumeDue uses activity-based costing.

  1. What is the cost driver rate for finishing?

           

  1. What is the cost driver rate for shipping?

  1. What is the manufacturing overhead cost perbike for the Mountain Bike?

  1. What is the total cost per bike ofthe Mountain Bike?

Answer & Explanation Solved by verified expert
3.7 Ratings (334 Votes)
Solution 1 Cost driver rate for Finishing Total Finishing cost Total Finishing Activities 240000 80004000 240000 12000 20 Solution 2 Cost driver rate for shipping Total Shipping cost    See Answer
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