Question

Telecom uses activity-based costing to allocate all manufacturing conversion costs. Telecom produces cellular​ telephones; each phone has​ $50.00 of direct​ materials, includes 20 parts and requires 6 hours of machine time. Additional information​ follows:Activity Allocation Base Cost Allocation RateMaterials handling Number of parts $0.50 per partMachining Machine hours $14.00 per machine hourAssembling Number of parts $1.00 per partPackaging Number of finished units $2.00 per finished unitWhat is the cost of machining per phone?

Answer 1

$84.00

Step-by-step explanation:

The cost of machining per phone will be calculated as;

Machine time required x cost per machine hour

Here Given is:

6 hours of machine time

$14.00 per machine hour rate

6 hours × $14.00 = $84.00