Brannon Company manufactures ceiling fans and uses an activity-based costing system
Each ceiling fan has 20 separate parts. The direct material cost is $70, and each ceiling fan requires 4.00 hours of machine time to manufacture. Additional information is as follows:
Activity Allocation Base Predetermined Overhead Allocation Rate
Materials handling Number of parts $ 0.08
Machining Machine hours 6.20
Assembling Number of parts 0.30
Packaging Number of finished units 2.30
What is the cost of materials handling per ceiling fan? (Round any intermediate calculations and your final answer to two decimal places.)
A) $1.60
B) $6.20
C) $2.30
D) $9.20
A .A)
Calculation of materials handling cost per unit:
Number of parts used 20
Materials handling cost per part $0.08
Materials handling cost per unit ($0.08 x 20 ) $1.60
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