CompInc.CompInc. produces two products: a high-end laptop computer and an inexpensive laptop. The two products use two manufacturing overhead activities, which have the following costs:
Setting up equipment $8,000
Machining 48,000
The controller has collected the expected annual prime costs for each product, the machine hours, the setup hours, and the expected production. $\begin{array}{lrr}&\text { High-end}&\text { Inexpensive }\
\text { Direct Labour } & \$ 24,000 & \$ 8,000 \
\text { Direct Materials } & 15,000 & 4,000 \
\text { Units } & 2,000 & 2,000 \
\text { Machine Hours } & 1,000 & 3,000 \
\text { Sebup Hours } & 150 & 50
\end{array}$
-Refer to CompInc. What is the manufacturing overhead cost per unit for each inexpensive laptop, when using manufacturing overhead rates that are based on machine hours and setup hours?
A) $10.00 per unit
B) $19.00 per unit
C) $20.00 per unit
D) $21.00 per unit

Question

Quizplus · Accepted Answer

The manufacturing overhead cost per unit for each inexpensive laptop is $19.00 when using manufacturing overhead rates that are based on machine hours and setup hours. This is calculated as follows:Machine hours: 3,000 hoursSetup hours: 50 hoursTotal manufacturing overhead cost: $8,000 + $48,000 = $56,000Manufacturing overhead cost per machine hour: $56,000 / 3,000 hours = $18.67Manufacturing overhead cost per setup hour: $56,000 / 50 hours = $1,120Manufacturing overhead cost per unit: ($18.67 x 3 hours) + ($1,120 x 0.5 hours) = $19.00

CompIncCompInc -Refer to CompInc