Question

Product X used the following quantity of activity drivers to produce 100 units of final product: 25 setups, 40 material moves and 75 machine hours What is the total indirect manufacturing cost per unit for product X based on an ABC system? g

Answer 1

Answer:

$137.50 per unit

Explanation:

The computation of the total indirect manufacturing cost per unit is shown below:

Machine setups  15000 ÷ 100 × 25 = $3750

Material moves   22500 ÷ 225 × 40 = $4000

M/c. Operations 14000 ÷ 175 × 75 = $6000

Total Cost for 100 units                     $13,750

And since there is 100 units

So, the total indirect manufcturing cost per unit is

= $13,750 ÷100 units

= $137.50