galvaset indutries manufactures 497286

P13-16 Activity-based costing versus traditional overhead allocation methods [LO 9] Galvaset Indutries manufactures and sells custom-made windows. Its job costing system was designed using an activity-based costing approach. Direct materials and direct labor costs are accumulated separately, along with information concerning three manufacturing overhead cost drivers (activities). Assume that the direct labor rate is $20 per hour and that there were no beginning inventories. The following information was available for 2010, based on an expected production level of 50,000 units for the year, which will require 200,000 direct labor hours: Activity (Cost Driver) Budgeted Costs for 2010 Cost Driver Used as Allocation Base Cost Allocation Rate Materials handling $ 325,000 Number of parts used $ 0.25 per part Cutting and lathe work 2,340,000 Number of parts used 1.80 per part Assembly and inspection 5,000,000 Direct labor hours 25.00 per hour The following production, costs, and activities occurred during the month of March: Units Produced Direct Materials Costs Number of Parts Used Direct Labor Hours 3,800 $142,000 83,600 17,180 Required: (a) Calculate the total manufacturing costs and the cost per unit of the windows produced during the month of March (using the activity-based costing approach). (Round “cost per unit produced” to 2 decimal places and the rest to the nearest dollar amount. Omit the “$” sign in your response.) Total manufacturing cost $ Cost per unit produced $ (b) Assume instead that Galvaset Industries applies manufacturing overhead on a direct labor hours basis (rather than using the activity-based costing system previously described). Calculate the total manufacturing cost and the cost per unit of the windows produced during the month of March. (Hint: You will need to calculate the predetermined overhead application rate using the total budgeted overhead costs for 2010.) (Do not round your intermediate calculations. Round “cost per unit produced” to 2 decimal places and the rest to the nearest dollar amount. Omit the “$” sign in your response.) Total manufacturing cost $ Cost per unit produced $