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a person who has been managing a dry cleaning store for $30,000 per year decides to open his own dry cleaning store. the expenses are $35,000 for salaries (excluding the owner's) $10,000 for supplies, $8,000 for rent, $2,000 for utilities, and $5,000 for interest on a bank loan. the implicit costs include: multiple choice question.

Answer :

Option D - $22.64

Activity Overhead cost Total expected activity Activity rate Activity of fancy Overhead assigned

Supporting direct labor $468,000 36,000 $13 25,000 $325,000

Setting up machines $222,180 1,932 $115 908 $104,420

Parts administration $397,020 1,018 $390 350 $136,500

Total overhead cost assigned         $565,920

Calculations of per unit overhead cost assigned to product fancy:

Overhead cost per unit = Total overhead cost assigned / Annual production

                                    = $565,920 / 25,000

                                    = $22.64

Answer is option D - $22.64

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