Posted: July 12th, 2016

Calculate the total manufacturing cost and the cost per unit for the month of August?

Both questions are correctly formatted in the two attachments. Thanks in advance for the guidance.

1. Kinney Industries has recently switched its method of applying manufacturing overhead from a single predetermined overhead rate based on direct labor hours to activity-based costing (ABC). Assume that the direct labor rate is $18.00 per hour and that there were no beginning inventories. The following cost drivers and rates have been developed for allocating manufacturing overhead costs:

Activity Cost Driver Rate
Material handling Number of parts used $2.00 per part
Assembly and inspection Number of direct labor hours $25.00 per DLH
Testing Number of units tested $5.00 per unit

The following production, costs, and activities occurred during the month of August:

Units Produced Direct Material Cost Number of Parts Used Direct Labor Hours
6,400 $208,600 142,000 26,480

A) Calculate the total manufacturing cost and the cost per unit for the month of August.
B) Assume instead that Kinney Industries applies manufacturing overhead on the basis of $40.00 per
direct labor hours (rather than the ABC method). Calculate the total manufacturing overhead cost applied for the month of August.

1. Seville Limited. incurred the following costs during March:

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