Swiss Furniture Company manufactures bookshelves and uses an activity-based costing system. The following information is provided for the month of May:
Activity Estimated Indirect Activity Costs Allocation Base Estimated Quantity of Allocation Base
Materials handling $6,400 Number of parts 3,200 parts
Assembling $11,200 Number of parts 3,200 parts
Packaging $2,240 Number of units 800 bookshelves
Each bookshelf consists of 4 parts. The direct materials cost per bookshelf is $30.00.
What is the cost of materials handling and assembling per bookshelf?
A) $8.00
B) $24.80
C) $22.00
D) $14.00
C
Explanation: C)
Handling $6400 / 3200 parts × 4 parts = 8.00
Assembling $11,200 / 3200 parts × 4 parts = 14.00
Total 22.00
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