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26. Answer: c.
Direct materials $140
Machine set up (3 x $180/60) 9
Materials handling ($15 x 35) 525
Milling ($50 x 6) 300
Assembly ($30 x 4) 120
Manufacturing cost per unit $1,094
27. Answer: d.
Budgeted costing system uses budgeted costs and budgeted professional labour hours
(PLH) in establishing the direct and indirect cost rates.
Budgeted direct cost rate = ($92,000 x 8 + $41,600 x 10) 28,800 PLH
= $40.00 per PLH
Budgeted indirect cost rate = $691,200 28,800 PLH = $24.00 per PLH
Choice a) Incorrectly uses actual costs and actual PLH to determine the rates:
Actual direct cost rate = ($95,000 x 8 + $47,840 x 10) 29,200 PLH
= $42.41 per PLH
Actual indirect cost rate = $711,936 29,200 PLH = $24.38 per PLH
Choice e) The direct and indirect cost rates are $40.00 and $24.00 per PLH,
respectively (choice a).
50 CMA Canada