Exhibit 17-4 The Dormir Company uses an activity-based costing system to account for its process of manufacturing camping tents. Each tent has $140 of direct materials, includes 15 parts, and requires 3 hours of machine time. Information on conversion costs, manufacturing activities, and cost drivers is listed below.

-Refer to Exhibit 17-4. The cost of assembling per tent is:

Question

Exhibit 17-4 The Dormir Company uses an activity-based costing system to account for its process of manufacturing camping tents. Each tent has $140 of direct materials, includes 15 parts, and requires 3 hours of machine time. Information on conversion costs, manufacturing activities, and cost drivers is listed below.
 
-Refer to Exhibit 17-4. The cost of assembling per tent is:

Quizplus · Accepted Answer

The cost of assembling per tent can be calculated as follows: 
Cost driver for Assembling = Number of parts, 15 parts per tent 
Cost per part = $1.20 ($18,000 ÷ 15,000 parts) 
Assembling cost per tent = Number of parts * Cost per part 
= 15 * $1.20 = $18.00 
Therefore, the cost of assembling per tent is $18.00.

Note: The other options are incorrect because direct labor hours and machine hours are not used as cost drivers for assembling. Additionally, the cost of materials and other conversion costs are already accounted for separately in the activity-based costing system.

Exhibit 17-4 the Dormir Company Uses an Activity-Based Costing System