Question

Yuma, Inc. manufactures teddy bears and dolls. Currently, Yuma makes 2,100 teddy bears each month. Each teddy bear uses $3.50 in direct materials and $1.00 in direct labor. Yuma uses two activities in manufacturing the teddy bears: Sewing and Processing. The cost associated with Sewing is $15,750 a month, allocated on the basis of direct labor hours. The cost associated with Processing is $10,500 a month, allocated on the basis of batches. Teddy bears use 1/2 of the direct labor hours, and 35% of total batches. What is the total manufacturing cost for one teddy bear?

Answer 1

$10.00

Step-by-step explanation:

Calculation for the total manufacturing cost for one teddy bear

Total manufacturing cost=$3.50 + $1.00 + [($15,750 × 1/2)/2,100] + [($10,500 × 35%)/2,100]

Total manufacturing cost=$3.50 + $1.00 + ($7,875/2,100) + ($3,675/2,100)

Total manufacturing cost=$3.50 + $1.00 + $3.75+ $1.75

Total manufacturing cost=$10.00

Therefore the total manufacturing cost for one teddy bear will be $10.00