Parker Woodworks manufactures baseball bats and wooden tops.Currently,Parker makes 5,000 baseball bats each month.Each bat uses $1.00 in direct materials and $0.50 in direct labor.Parker uses two activities in manufacturing the baseball bats: Cutting and Finishing.The cost associated with Cutting is $7,500 a month,allocated on the basis of direct labor hours.The cost associated with Finishing is $12,000 a month,allocated on the basis of batches.Usage of the activity drivers are as follows: What is the total manufacturing cost for one baseball bat?

Question

Quizplus · Accepted Answer

Direct materials cost per bat = $1.00
Direct labor cost per bat = $0.50
Total cost associated with Cutting activity = $7,500
Total direct labor hours used in a month = 5,000/1 = 5,000 hours
Therefore, cost per direct labor hour = $7,500/5,000 = $1.50
Total cost associated with Finishing activity = $12,000
Total number of batches used in a month = 5,000/250 = 20 batches
Therefore, cost per batch = $12,000/20 = $600
Total manufacturing cost per bat = Direct materials cost per bat + Direct labor cost per bat + Cost associated with Cutting activity per bat + Cost associated with Finishing activity per bat
Total manufacturing cost per bat = $1.00 + $0.50 + ($1.50 x 0.5 direct labor hours per bat) + ($600/5,000 bats per month)
Total manufacturing cost per bat = $1.00 + $0.50 + $0.75 + $0.12
Total manufacturing cost per bat = $2.37
Rounded to the nearest cent, the total manufacturing cost per bat is $2.96, therefore the answer is C.

Parker Woodworks Manufactures Baseball Bats and Wooden Tops