Brannon Inc. manufactures ceiling fans and uses activity-based costing. Each fan has 20 separate parts. The direct material cost is $70, and each ceiling fan requires 4 hours of machine time to manufacture. Additional information: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.08/part Machining Machine hours $6.20/MH What is the total manufacturing cost per ceiling fan?

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Business

Raelynn Faulkner

22 April, 08:04

Brannon Inc. manufactures ceiling fans and uses activity-based costing. Each fan has 20 separate parts. The direct material cost is $70, and each ceiling fan requires 4 hours of machine time to manufacture. Additional information: Activity Allocation Base Predetermined Overhead Allocation Rate Materials handling Number of parts $ 0.08/part Machining Machine hours $6.20/MH What is the total manufacturing cost per ceiling fan?

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Kira Macdonald · Answer 1

Answer: The total manufacturing cost per ceiling fan is $96.4

Explanation:

Hi, to calculate the total manufacturing cost per ceiling fan we have to sum:

Direct material cost + number of parts (cost per part handling) + machine hours (cost of each machine hour)

Replacing with the values given

70 + 20 (0.08) + 4 (6.20) = 70 + 1.6+24.8 = $96.4

The total manufacturing cost per ceiling fan is $96.4