Physical Flow, Equivalent Units, Unit Costs, No Beginning WIP Inventory, Activity-Based Costing, DBC McKay, Inc.,...
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Physical Flow, Equivalent Units, Unit Costs, No Beginning WIP Inventory, Activity-Based Costing, DBC
McKay, Inc., produces a subassembly used in the production of hydraulic cylinders. The subassemblies are produced in three departments: Plate Cutting, Rod Cutting, and Welding. Materials are added at the beginning of the process. Overhead is applied using the following drivers and activity rates:
Driver
Rate
Actual Usage (by Plate Cutting)
Direct labor cost
150% of direct labor
$87,840
Inspection hours
$40 per hour
4,002 hours
Number of moves
$100 per move
1,680 moves
During the first quarter, the Plate Cutting Department used 20,900 hours (direct, indirect, and machine hours) to produce the quarter's output. Other quarterly data for the Plate Cutting Department are as follows:
Beginning work in process, January 1
Units started
90,000
Direct materials cost
$630,000
Units, ending work in process (100% materials; 64% conversion), March 31
6,000
d. According to production engineering, if efficiency were increased to an ideal level, then the cycle time should be 0.20 hours. If this were to occur, what would the cost per plate be? (round to the nearest cent)?
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