tent master produces pup tents and pop - up tents. the company budgets $252,000 of overhead cost and 42,000…

tent master produces pup tents and pop - up tents. the company budgets $252,000 of overhead cost and 42,000 direct labor hours. additional information follows.\n\n|activity|budgeted cost|activity cost driver|budgeted activity usage|\n|--|--|--|--|\n|assembly|$168,000|direct labor hours (dlh)|42,000|\n|electricity|24,000|machine hours (mh)|10,000|\n|materials purchasing|60,000|purchase orders (po)|400|\n|total|$252,000|\n\nthe following actual activity usage produced 10,000 pup tents and 6,000 pop - up tents.\n\n|activity cost driver|activity usage - pup tents|activity usage - pop - up tents|\n|--|--|--|\n|direct labor hours (dlh)|30,000|12,000|\n|machine hours (mh)|4,000|6,000|\n|purchase orders (po)|150|250|\n\ncompute overhead cost per unit for pup tents.\n\na. $15.21\nb. $152,100\nc. $99,900\nd. $16.65

tent master produces pup tents and pop - up tents. the company budgets $252,000 of overhead cost and 42,000 direct labor hours. additional information follows.\n\n|activity|budgeted cost|activity cost driver|budgeted activity usage|\n|--|--|--|--|\n|assembly|$168,000|direct labor hours (dlh)|42,000|\n|electricity|24,000|machine hours (mh)|10,000|\n|materials purchasing|60,000|purchase orders (po)|400|\n|total|$252,000|\n\nthe following actual activity usage produced 10,000 pup tents and 6,000 pop - up tents.\n\n|activity cost driver|activity usage - pup tents|activity usage - pop - up tents|\n|--|--|--|\n|direct labor hours (dlh)|30,000|12,000|\n|machine hours (mh)|4,000|6,000|\n|purchase orders (po)|150|250|\n\ncompute overhead cost per unit for pup tents.\n\na. $15.21\nb. $152,100\nc. $99,900\nd. $16.65

Answer

Explanation:

Step1: Calculate assembly cost per DLH

The budgeted assembly cost is $168,000 and budgeted direct - labor hours are 42,000. The assembly cost per direct - labor hour ($AC_{DLH}$) is $\frac{168000}{42000}=4$ dollars per DLH.

Step2: Calculate electricity cost per MH

The budgeted electricity cost is $24,000 and budgeted machine hours are 10,000. The electricity cost per machine hour ($AC_{MH}$) is $\frac{24000}{10000}=2.4$ dollars per MH.

Step3: Calculate materials purchasing cost per PO

The budgeted materials purchasing cost is $60,000 and budgeted purchase orders are 400. The materials purchasing cost per purchase order ($AC_{PO}$) is $\frac{60000}{400}=150$ dollars per PO.

Step4: Calculate total overhead cost for Pup tents

For Pup tents, direct - labor hours are 30,000, machine hours are 4,000 and purchase orders are 150. The assembly cost for Pup tents is $4\times30000 = 120000$ dollars. The electricity cost for Pup tents is $2.4\times4000=9600$ dollars. The materials purchasing cost for Pup tents is $150\times150 = 22500$ dollars. The total overhead cost for Pup tents ($TC$) is $120000 + 9600+22500=152100$ dollars.

Step5: Calculate overhead cost per unit for Pup tents

There are 10,000 Pup tents. The overhead cost per unit ($OC_{per - unit}$) is $\frac{152100}{10000}=15.21$ dollars per unit.

Answer:

A. $15.21$