The local bakery has been using job order costing and is deciding whether to use activity-based costing. The bakery makes many different products, including the one you produced in the job order costing project. In this project, you will calculate the unit product cost under activity-based costing for the same bakery product you produced in the job order costing project.
The bakery has identified the following activity cost pools, cost drivers, and total yearly quantity for the cost drivers, and percentage of total estimated manufacturing overhead cost allocated to each cost pool. The bakery estimates $50,000 in total manufacturing overhead.
Activity Cost Pool
Cost Driver Quantity
Percent of Total Manufacturing Overhead
Materials Ordering and Inspection
Number of purchase orders
Number of setups
Number of inspections
Number of direct labor hours
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