Conquest Machining Ltd.is a manufacturer of precision hand tools,is concerned with the apparent lack of controls over cost incurrence in its Pliers Division.The division has always used a plant-wide rate for allocating manufacturing overhead to its products.However,some products cost substantially more than competitors retail prices while others are substantially less.The division manager believes that a better cost allocation method can be developed.
With the assistance of a plant supervisor,the accounting department has been able to establish the following relationships between production activities and the indirect costs of the activities:

The traditional allocation method is based upon direct manufacturing labour hours,and if that method is used the rate is $28 per hour.
Required:
Compute the unit indirect manufacturing costs of a batch of 200 tools if the batch required 220 parts,8 machine hours,52 minutes of finishing time,and 46 direct labour hours:

Question

Conquest Machining Ltd.is a manufacturer of precision hand tools,is concerned with the apparent lack of controls over cost incurrence in its Pliers Division.The division has always used a plant-wide rate for allocating manufacturing overhead to its products.However,some products cost substantially more than competitors retail prices while others are substantially less.The division manager believes that a better cost allocation method can be developed.
With the assistance of a plant supervisor,the accounting department has been able to establish the following relationships between production activities and the indirect costs of the activities:
  
The traditional allocation method is based upon direct manufacturing labour hours,and if that method is used the rate is $28 per hour.
Required:
Compute the unit indirect manufacturing costs of a batch of 200 tools if the batch required 220 parts,8 machine hours,52 minutes of finishing time,and 46 direct labour hours:

Quizplus · Accepted Answer

The Answer of Conquest Machining Ltd.is a manufacturer of precision hand tools,is concerned with the apparent lack of controls over cost incurrence in its Pliers Division.The division has always used a plant-wide rate for allocating manufacturing overhead to its products.However,some products cost substantially more than competitors retail prices while others are substantially less.The division manager believes that a better cost allocation method can be developed.
With the assistance of a plant supervisor,the accounting department has been able to establish the following relationships between production activities and the indirect costs of the activities:
  
The traditional allocation method is based upon direct manufacturing labour hours,and if that method is used the rate is $28 per hour.
Required:
Compute the unit indirect manufacturing costs of a batch of 200 tools if the batch required 220 parts,8 machine hours,52 minutes of finishing time,and 46 direct labour hours: