Average cost of product
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Ravelo Corporation has provided the following data from its activity-based costing system:
Activity Cost Pool Total Cost Total Activity
Assembly 498,520 44,000 machine-hours
Processing orders 54,263 1,100 orders
Inspection 77,589 1,110 inspection-hours
Data concerning the company's product L19B appear below:
Annual unit production and sales 430
Annual machine-hours 990
Annual number of orders 70
Annual inspection hours 20
Direct materials cost 37.74 per unit
Direct labor cost 10.45 per unit
According to the activity-based costing system, the average cost of product L19B is closest to:
85.56 per unit
82.31 per unit
48.19 per unit
77.53 per unit
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This provides the steps to compute the average cost of products. Step by step calculations are given in each solution.
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Ravelo Corporation has provided the following data from its activity-based costing system:
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