Ace Plastics produces many different kinds of products all in one manufacturing facility.
They have identified four activities for their costing system:
Materials management – allocated by number of purchase orders
Chemical processing – allocated on metric tons
Molding – allocated on direct labor hours
Packaging – allocated by number of units produced
The activity rates are as follows:
|
Materials management |
$12.00 |
Per purchase order |
|
Chemical processing |
$ 7.50 |
Per metric ton |
|
Molding |
$24.00 |
Per direct labor hour |
|
Packaging |
$ 0.10 |
Per unit |
Ace received an order for 3,000 plastic toys. The engineering design shows that the order will require $540 of direct material cost in total, $90 of direct labor cost, will require 4 purchase orders, will use 2 metric tons of chemical base, will need 8 direct labor hours, and will produce 3.000 units of product.
What will the full production cost of the order be?