(Answered) Question - dillon corporation manufactures computer

Accounting

Question - Dillon Corporation manufactures computer monitors. The company uses a job order costing system, using a plant-wide rate for allocating overhead costs. The current cost method allocates overhead on the basis of direct manufacturing labor hours, using a rate of $100 per labor hour. The plant manager is considering switching over to an activity-based costing system and identifies the following production activities and their cost drivers (these activities are performed for a batch of 99 monitors).

Activities	Cost driver	Allocation Rate
Material handling	Number of parts	$2 per part
Assembly	Labor hours	$20 per hour
Inspection	Minutes at inspection station	$3 per minute

What are the overhead costs per one unit of monitors if the activity-based costing system is used and a batch of 99 monitors are produced? The batch requires 400 parts, 8 direct manufacturing labor hours, and 10 minutes of inspection time.

$8 per monitor

$13 per monitor

$10 per monitor

$12 per monitor

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