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A company makes three products, E, F and G. Total overheads for the year are expected to be $1.2 million, with the following split between cost pools:
Cost driver information has been estimated as follows:
The company plans to make 10,000 units of product E in the year, with an expected direct cost of $0.60 per unit. This annual production of product E is expected to require 20 quality inspections, 28 purchase requisitions, and 400 kilogrammes of materials.
What is the overhead cost per unit of product E?
Suggested Answer: C, D
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29 comments · newest first
RA
Raul
12 months ago
Are we sure about those cost driver estimates?
TE
Teri
12 months ago
Definitely going with option C, $3.57.
LA
Lavonne
1 year ago
Wait, how does that add up to $4.17 per unit? Seems high!
HO
Hortencia
1 year ago
I think the overhead cost per unit is $0.70.
MA
Marylou
1 year ago
Overheads are $1.2 million for the year.
MI
Mindy
1 year ago
I feel like the answer might be closer to $4.17, but I need to double-check how we calculated the overheads for each cost driver.
BE
Bernadine
1 year ago
I think the overhead cost per unit is calculated by dividing the total overhead allocated to product E by the number of units produced. But I can't recall the exact numbers we used in practice.
LI
Linwood
1 year ago
I'm a bit unsure about how to split the overheads among the cost pools. Did we cover how to allocate those costs based on the number of inspections and requisitions?
OL
Oliva
1 year ago
I remember we practiced a similar question where we had to allocate overheads based on different cost drivers. I think we need to calculate the total overhead for product E first.
FE
Felicia
1 year ago
No problem, I've worked with NetworkPolicies before. I'll start by identifying the labels for the web and db pods, then use those in the NetworkPolicy to allow traffic between them and the ckad00018-newpod.
TU
Tu
1 year ago
This seems pretty simple, but I want to make sure I'm not missing anything. I'll double-check the sample data and the requirements to make sure I understand exactly what I need to do.
PH
Phil
1 year ago
Hmm, I'm not sure about this one. Some of these questions seem a bit leading, but I'm not totally confident in my ability to spot them.
SH
Shantell
1 year ago
Okay, let's do this! I'm feeling confident about this one. With a little bit of number crunching, I'm sure I can nail the overhead cost per unit of product E.
LA
Lavonna
1 year ago
Haha, this question is a real brain-teaser! I bet the answer is hidden somewhere in all those numbers and formulas. Time to put on my thinking cap!
TE
Teri
1 year ago
I'm pretty sure it's $4.17.
AG
Agustin
1 year ago
No, I believe it's $3.57.
TO
Toshia
1 year ago
I think the overhead cost per unit of product E is $0.10.
NO
Nobuko
1 year ago
Hmm, I'm not sure about this one. The cost driver information seems a bit complex, but I think I can figure it out if I break it down carefully.
GR
Gracia
1 year ago
D) $4.17
RO
Rossana
1 year ago
C) $3.57
QU
Quiana
1 year ago
B) $0.70
ON
Ona
1 year ago
A) $0.10
KA
Kaitlyn
1 year ago
Alright, let's think this through step-by-step. If the total overheads are $1.2 million and the company plans to make 10,000 units of product E, the overhead cost per unit should be straightforward to calculate.
WE
Wei
1 year ago
Finally, we can divide the total overhead cost for product E by the number of units to find the overhead cost per unit.
WE
Wei
1 year ago
Then we can determine the total overhead cost for product E by multiplying the cost driver rates by the number of units of product E.
WE
Wei
1 year ago
Let's start by calculating the total cost for each cost pool.
GL
Glenna
2 years ago
I calculated it based on the cost driver information provided in the question.
HA
Haydee
2 years ago
I disagree, I believe it is $3.57 per unit.
GL
Glenna
2 years ago
I think the overhead cost per unit of product E is $0.10.