Garrett Company manufactures coffee tables and uses an activity-based costing system to allocate all manufacturing conversion costs

Each coffee table consists of 15 separate parts totaling $125 in direct materials, and requires 2.0 hours of machine time to produce. Additional information follows:

Activity Allocation Base Cost Allocation Rate
Materials handling Number of parts $1.75 per part
Machining Machine hours $2.00 per machine hour
Assembling Number of parts $0.50 per part
Packaging Number of finished units $2.75 per finished unit

What is the total manufacturing cost per coffee table?
A) $165.50
B) $40.50
C) $162.75
D) $30.00

A
Explanation: A)
Handling 15 parts × 1.75 = 26.25
Machining 2 hrs × 2.00 = 4.00
Assembly 15 parts × .50 = 7.50
Packaging = 2.75
Direct materials = 125.00
Total = 165.50