Hummingbird Manufacturing manufactures small parts and uses an activity-based costing system
Activity Est. Indirect Activity
Costs Allocation base Cost allocation rate
Materials $75,000 Material moves $3.00/move
Assembling $255,000 Direct labor hours $10.00/dir. labor hour
Packaging $90,000 # of finished units $1.00/finished unit
The following parts were produced in October with the following information:
Part # Produced Materials Costs # Moves Dir. Labor Hrs.
A 2,250 $3,000 900 250
B 4,000 $6,500 1,700 325
C 4,750 $9,000 2,500 1,500
Total manufacturing costs for part A is
A) $7,450.
B) $5,200.
C) $10,450.
D) $8,200.
C
Explanation: C)
Materials costs = $3,000
Overhead:
Materials 900 moves × $3 = 2,700
Assembling 250 hour × $10 = 2,500
Packaging 2,250 units × $1.00 = 2,250
Total = $10,450
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