Manufacturing overhead = $80 per machinehour
anticipated volume= 8,000 (type a) and 15,000 (type b)
direct mat cost =$35 (type a) and $60 (type b)
direct lab cost= 20 (type a) and 20 (type b)
three cost drivers:
setups......50 (type a) 30 (type b) total=80
machine hours----16,000 (type a) 22,500 (type b) total=38,500
outgoing shipments.... 100 (type a) 75 (type b) total=175
overhead = 3,080,000 setups=672,000, machine processing=1,848,000,product shipping= 560,000
What is unit manufacturing cost of A &B by using the currentoverhead ? What is unit manufacturing cost of A&B using ABC? isthe cost of A overstated/understated? how? - mathematically explain