Posted: July 20th, 2016
controller accumulates the following information about overhead for the year ended December 31, 2010.
Cost Driver Estimated Overhead Expected Use
of Cost Drivers Activity Based Overhead Rate
Purchasing Number of orders $1,200,000 40,000 $30 /order
Machine setups Number of setups 900,000 18,000 50 /setup
Machining Machine hours 4,800,000 120,000 40 /hour
Quality control Number of inspections 700,000 28,000 25 /inspection
The cost drivers used for each product were:
Cost Driver Royale Majestic Total
Purchase orders 15,000 25,000 40,000
Machine setups 5,000 13,000 18,000
Machine hours 75,000 45,000 120,000
Inspections 9,000 19,000 28,000
Assign the total 2010 manufacturing overhead costs to the two products using activity based costing (ABC).
What was the cost per unit and gross profit of each model using ABC costing? (Round your answers to 2 decimal places, e.g. 250.25.)
Cost per Unit
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