Activity Based Costing - Management Accounting M/C Question?

Question

Assume that a batch of 100 carving knives requires 200 parts ($4 per part), 12 direct manufacturing labour-hours ($40 per hr), and 5 minutes of inspection time ($6 per minute).

What are the indirect manufacturing costs per carving knife to produce a batch of 100 carving knives, assuming the activity-based method of allocation is used?

Answers a)$4.80 b)$8.00 c)$13.10 d)$48.00

Thanks for any help with this problem;

Answer 1

Can you check the problem again?

1 batch of 100 carving knives requires

200 DM

12 DLH

5 minutes inspection times (indirect OH) at $6/ minutes

If the question is indirect then only the inspection times should be taken into a/c. The 5 minutes is for a batch of 100 carving knives, so cost = 5 x $6/minutes = $30

per carving knives, the cost would then be $30/100 = $0.3