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. The activity drivers are used as follows: Baseball bats
Wooden tops
Direct labor hours
100
200
Batches
4
6
What is the total manufacturing cost for one baseball bat?

Question

Quizplus · Accepted Answer

1. Calculation of Cutting Cost per direct labor hour = ($7,500/month) / ((100 + 200) direct labor hours/month) = $18.75 per direct labor hour
2. Calculation of Finishing Cost per batch = ($12,000/month) / ((4 + 6) batches/month) = $1,200 per batch
3. Calculation of total direct manufacturing cost per baseball bat = ($1.00 direct materials + $0.50 direct labor + $18.75 Cutting Cost per direct labor hour * direct labor hours per bat + $1,200 Finishing Cost per batch/batches per bat) / units per month = ($1.00 + $0.50 + $18.75 * 0.5 + $1,200 * 1/5000) = $2.96

Parker Woodworks Manufactures Baseball Bats and Wooden Tops