Question

ABC Manufacturing produces a product that includes four tasks: cutting, drilling, sanding and painting. The production supervisor wants to know the cost of each task for this months production run of 1,000 units. She has identified several costs that must be allocated to these tasks including: $50,000 of depreciation on manufacturing equipment, $40,000 of utilities, $30,000 of rent and $2,000 of supplies. She has chosen to distribute all these costs to the four tasks based on machine hours. Cutting these 1,000 units required 900 hours, drilling them required 300 hours, sanding 800 hours and painting 400 hours. What is the weight of base?

Answer 1

2400

Step-by-step explanation:

Data provided in the question:

Cost allocated to Depreciation on manufacturing equipment = $50,000

Cost allocated to Utilities = $40,000

Cost allocated to Rent = $30,000

Cost allocated to supplies = $2,000

Required machine hours for cutting = 900

Required machine hours for drilling = 300

Required machine hours for sanding = 800

Required machine hours for painting = 400

Now,

Since the distribution is based on the machine hours

Therefore,

Weight of base = Total machine hours required

= 900 + 300 + 800 + 400

= 2400