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

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.