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: What is the total manufacturing cost for one baseball bat?

Question

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:  What is the total manufacturing cost for one baseball bat?

Quizplus · Accepted Answer

- Direct Materials Cost per bat = $1.00
- Direct Labor Cost per bat = $0.50
- Cost allocated to Cutting activity = $7,500, with 1,500 direct labor hours
- Cost allocated to Finishing activity = $12,000, with 200 batches per month
- Cost per direct labor hour for cutting activity = $7,500 / 1,500 = $5.00 per hour
- Cost per batch for finishing activity = $12,000 / 200 = $60 per batch
- Cutting activity cost per bat = $5.00 x 0.5 direct labor hours = $2.50
- Finishing activity cost per bat = $60 / 5,000 bats = $0.012 per bat
- Total manufacturing cost per bat = Direct Materials Cost + Direct Labor Cost + Cutting Activity Cost + Finishing Activity Cost
- Total manufacturing cost per bat = $1.00 + $0.50 + $2.50 + $0.012 = $2.96 per bat

Parker Woodworks Manufactures Baseball Bats and Wooden Tops