Sleep Tight Company Manufactures Pillows Using an Activity-Based Costing System

question 60

Multiple Choice

Sleep Tight Company manufactures pillows using an activity-based costing system. The following information is provided for the month of June:
$\begin{array}{|l|r|r|r|}\hline &\text { Estimated Indirect }&&\text { Estimated Quantity of } \\\text { Activity } & \text { Activity Costs } & \text { Allocation Base } & \text { Allocation Base }\\\hline \text { Materials handling } & \$ 3,150 & \text { Number of parts } & 4,200 \text { parts } \\\hline \text { Assembling } & \$ 13,860 & \text { Number of parts } & 4,200 \text { parts } \\\hline \text { Packaging } & \$ 2,730 & \text { Number of pillows } & 1,050 \text { pillows }\\\hline\end{array}$

Each pillow consists of 4 parts, and the total direct materials cost per pillow is $3.50.
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What is the total cost of materials handling and assembling for each pillow?

• A) $15.40
• B) $16.20
• C) $18.80
• D) $13.20

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