Question

Hang Ten Company manufactures surf boards and uses an activityminusbased costing system to allocate all manufacturing conversion costs. Each surf board consists of 30 separate parts totaling $ 155 in direct​ materials, and requires 3 hours of machine time to produce. The company incurs no direct labor costs. Additional information​ follows: Activity Allocation Base Cost Allocation Rate Materials handling Number of parts $ 3.75 per part Machining Machine hours $ 2.00 per machine hour Assembling Number of parts $ 1.50 per part Packaging Number of finished units $ 2.75 per finished unit What is the total manufacturing cost per surf​ board?

Answer 1

Total= $ 321.25

Step-by-step explanation:

Giving the following information:

Each surfboard consists of 30 separate parts totaling $ 155 direct​ materials and requires 3 hours of machine time to produce.

Materials handling: Number of parts $ 3.75 per part

Machining: Machine hours $ 2.00 per machine hour

Assembling: Number of parts $ 1.50 per part

Packaging: Number of finished units $ 2.75 per finished unit

Total manufacturing cost:

Direct materials= 155

Materials handling=$ 3.75* 30= $112.5

Machining: $ 2.00*3= 6

Assembling: $ 1.50*30= 45

Packaging: $ 2.75

Total= $ 321.25