Axelgold Company Produces Parts for the Auto Industry All Costs Are Driven by Machine Hours

question 114

Essay

Axelgold Company produces parts for the auto industry. Part X2 is machined in Department #1, which has the following budgeted conversion costs: $$\begin{array} { l r } \text { Labor } & \$ 330,000 \\\text { Depreciation } & 32,000 \\\text { Maintenance } & 12,000 \\\text { Supplies } & 26,000 \\ \text { Total } & \$ 400,000\end{array}$$ All costs are driven by machine hours. Total possible hours for the year are 2,800. It takes .03 hours to machine one unit of Part X2.
a) Compute Department #1's budgeted cell conversion cost rate for the current year. Round to the nearest cent.
b) Compute Part X2's budgeted cell conversion cost per unit. Round to the nearest cent.

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Definitions:

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