Mathias Company manufactures a number of specialized machine parts. Part Bunkka-22 uses $35 of direct materials and $15 of direct labor per unit.Mathias estimates manufacturing overhead is as follows:Materials handling$100000Machining200000Factory su
Mathias Company manufactures a number of specialized machine parts. Part Bunkka-22 uses $35 of direct materials and $15 of direct labor per unit.Mathias estimates manufacturing overhead is as follows:Materials handling$100000Machining200000Factory supervision150000Total$450000Overhead is applied based on direct labor costs which were estimated at $200000.Mathias is considering adopting activity-based costing. The cost drivers are estimated at:ActivityCost DriverExpected UseMaterials HandlingWeight of materials50000 poundsMachiningMachine hours20000 hoursFactory supervisionDirect labor hours12000 hoursIn the month of March New Day Spa services 570 clients at an average price of $120. During the month fixed costs were $21000 and variable costs were 65% of sales.