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QUESTION 77. PremierBed manufactures and markets sheets and duvet cover for the...
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QUESTION 77. PremierBed manufactures and markets sheets and duvet cover for the hospitality industry. For the month of June N, the indirect costs of the main analysis centres are distributed as follows.
Indirect cost breakdown table
|
Purchasing
|
Production
|
Marketing
|
After Sales
|
General Administration
|
Indirect costs
|
$3,200
|
$140,000
|
$13,000
|
$13,500
|
$37,500
|
Nature of the allocation base
|
$10 in purchases
|
Direct Labor Hours
|
$100 in sales
|
Sales
|
Production costs ($)
|
You have the following data.
Sheet sales: $740,000
Cost of producing sheets: $503,200
Direct labor hours for the manufacture of sheets: 4,130 hours
Consumable purchases: 200 kg at $6 per kg
Duvet cover sales: $262,400
Production cost of duvet covers: $178,432.
Direct labor hours for duvet covers: 1,470 h
Fabric purchases: 5,000 m for $35,000.
Thread spools purchases: 100 spools at $5.20 each.
What is the cost of an allocation base unit for the Marketing department?