Brannon Company manufactures ceiling fans and uses an activity-based costing system. Each ceiling fan consists of 20 separate parts. The direct material cost is $95 and each ceiling fan requires 2.5 hours of machine time to manufacture. Additional information is as follows: $\begin{array}{|l|l|c|}
\hline{\text { Activity }} & {\text { Allocation Base }} & \text { Cost Allocation Rate } \$ \
\hline \text { Materials handling } & \text { Number of parts } & 0.08 \
\hline \text { Machining } & \text { Machine hours } & 7.20 \
\hline \text { Assembling } & \text { Number of parts } & 0.35 \
\hline \text { Packaging } & \text { Number of finished units } & 2.70 \
\hline
\end{array}$
- What is the total manufacturing cost per ceiling fan?

Question

Quizplus · Accepted Answer

The total manufacturing cost per ceiling fan is calculated by adding the direct material cost and the costs from each activity:  - Direct Material: $95  - Materials Handling: 20 parts x $0.08 = $1.60  - Machining: 2.5 hours x $7.20 = $18.00  - Assembling: 20 parts x $0.35 = $7.00  - Packaging: 1 unit x $2.70 = $2.70  Total Cost = $95 + $1.60 + $18.00 + $7.00 + $2.70 = $124.30

Brannon Company Manufactures Ceiling Fans and Uses an Activity-Based Costing