Pecot Industries has provided the following data from itsactivity-based costing system:
Activity Cost Pools | Est. Overhead Cost | Expected Activity |
Assembly | $498,520 | 44,000 | Machine hours |
Processing orders | $54,263 | 1,100 | Orders |
Inspection | $77,589 | 1,110 | Inspection hours |
Data concerning Pecot’s product LB28 appears below:
Number of units produced 430
Machinehours 990
Number oforders 70
Inspectionhours 20
Direct materialscost $37.74 per unit
Direct laborcost $10.45 per unit
Calculate the total unit product cost of LB28:
(Step 1: Determine activity rates for each activity pool
Step 2: Determine overhead costs charged to product LB28
Step 3: Add up all product costs for LB28
Step 4: Determine unit product cost)
