Greenwood Company makes four types of patio sets: wood, plastic, wicker, and aluminum. Data regarding the four products follows:
Set Type DLHs/unit Annual Production (units)
Wood 2 1,400
Plastic 1 2,800
Wicker 5 7,000
Aluminum 3 14,000
Additional information about the company follows:
• Wood sets require $56 in direct materials per unit, plastic sets require $28, wicker sets require $84 and aluminum sets require $70.
• The direct labor wage rate for all production except for the aluminum sets is $15 per hour. Aluminum sets are more difficult to produce, so the wage rate for direct labor is $20 per hour.
• Wood and wicker sets go through a special painting process.
• Wood, plastic, and wicker sets all go through the sanding process.
The ABC system used for allocating Manufacturing Overhead Costs has the following activity pools:
Level of Activity
Activity Cost
Pool Activity Estimated Wood Plastic Wicker Aluminum
Measure Cost
Machine setups # of setups $190,400 140 140 700 1,400
Painting # pints used $42,000 350 1,750
Sanding # machine hrs $24,500 350 700 1,400
General factory # DLHs $495,600 2,800 2,800 35,000 42,000
What is the total cost per unit under the ABC system for wicker patio sets?
