Question

The Alright Manufacturing Company in Rochester, Minnesota, assembles and tests electronic components used in smartphones. Consider the following data regarding component T24 (amounts are per unit):

Direct materials cost \( 80.00

Direct labor cost 20.00

Activity-based costs allocated ?

Total manufacturing product cost ?

The activities required to build the component follow:

Activity Allocation Base Cost Allocated to

Each Unit

Start station Number of raw component chassis 4 * \) 1.50 = \( 6.00

Dip insertion Number of dip insertions ? * 0.30 = 9.60

Manual insertion Number of manual insertions 10 * 0.50 = ?

Wave solder Number of components soldered 4 * 1.90 = 7.60

Backload Number of backload insertions 7 * ? = 4.20

Test Number of testing hours 0.43 * 90.00 = ?

Defect analysis Number of defect analysis hours 0.15 * ?= 12.00

Total activity-based costs \) ?

Requirements

1. Complete the missing items for the two tables.

Short answer

Activity based cost allocated:$83.1

Total manufacturing product cost:$183.1

No. of dip insertion:32

Total Manual insertion cost:$5

Backload unit cost:$0.6

Total test cost:$38.7

Defect analysis unit cost:$8

Step-by-step solution

Computation of missing figures for activity table

$\begin{array}{c}Numberofdipinsertion=\frac{TotalDipinsertioncost}{UnitCost}\\ =\frac{\$9.60}{\$0.30}\\ =32\end{array}$

$\begin{array}{c}Totalcostofmanualinsertion=No.ofmanualinsertion\times UnitCost\\ =10\times \$0.50\\ =\$5\end{array}$$\begin{array}{c}Unitcostforbackload=\frac{Totalcost}{No.ofbackloadinsertion}\\ =\frac{\$4.2}{7}\\ =\$0.6\end{array}$$\begin{array}{c}Totaltestcost=No.oftestinghours\times UnitCost\\ =0.43\times \$90\\ =\$38.7\end{array}$$\begin{array}{c}Unitcostfordefectanalysis=\frac{Totalcost}{No.ofanalysishour}\\ =\frac{\$12}{0.15}\\ =\$80\end{array}$

Computation of missing figure for component T24

$$\begin{gathered} \begin{array}{c}Activitybasedcostallocated=Startstationcost+Dipinsertioncost+Manualinsertioncost+Wavesoldercost+Backloadcost+Teastcost+Defectanalysiscost\\ =\$6+\$9.6+\$5+\$7.6+\$4.2+\$38.7+\$12\\ =\$83.1\end{array} \\ \begin{array}{c}Totalmanufacturingproductcost=Activitybasedcostallocated+DirectMaterialcost+Directlaborcost\\ =\$83.1+\$80+\$20\\ =\$183.1\end{array} \end{gathered}$$