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.
- What is the cost driver rate for finishing?
- What is the cost driver rate for shipping?
- What is the manufacturing overhead cost perbike for the Mountain Bike?
- What is the total cost per bike ofthe Mountain Bike?
