compute the indirect manufacturing cost per unit using direct labor hours from the s 556813

Computing indirect manufacturing costs per unit

The following information is provided for the Orbit Antenna, Corp., which manufactures two products: Lo Gain antennas, and Hi Gain antennas for use in remote areas.

Activity

Cost

Cost Driver

Setup

$ 57,000

Number of setups

Machine maintenance

27,000

Machine hours

Total indirect manufacturing costs

$ 84,000

Lo Gain

Hi Gain

Total

Direct labor hours

1,400

3,600

5,000

Number of setups

30

30

60

Number of machine hours

1,800

1,200

3,000

Orbit plans to produce 75 Lo Gain antennas and 150 Hi Gain antennas.

Requirements

1. Compute the ABC indirect manufacturing cost per unit for each product.

2. Compute the indirect manufacturing cost per unit using direct labor hours from the single allocation base system.

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