Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system, the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo under the ABC system?
Solution
Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system, the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo under the ABC system?
Answer
$ 49
.
Mikoo- Inc- manufactures a product that uses $15 in direct materials a.docx
1. Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per
unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each
unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system,
the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo
under the ABC system?
Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor per
unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied to each
unit is $13. Mikoo is considering switching to an ABC system, however. Under the ABC system,
the total activity cost would be $26. What is the total manufacturing cost per unit for Mikoo
under the ABC system?
Solution
Mikoo, Inc. manufactures a product that uses $15 in direct materials and $8 in direct labor
per unit. Under the traditional costing system Mikoo uses, manufacturing overhead applied
to each unit is $13. Mikoo is considering switching to an ABC system, however. Under the
ABC system, the total activity cost would be $26. What is the total manufacturing cost per
unit for Mikoo under the ABC system?
Answer
$ 49
