Product Infantry Special forces Machine Hours Setups 300 Receiving Orders Packing Orders 900 20,000 1,600 20,000 100 100 800 Costs $80,000 $24,000 $18,000 $30,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity
Costing
Tristar Manufacturing produces two types of battery-operated toy
soldiers: infantry and special forces. The soldiers are produced by using
one continuous process. Four activities have been identified: machining,

setups, receiving, and packing. Resource drivers have been used to
assign costs to each activity. The overhead activities, their costs, and the
other related data are as follows:

Required:

1. Calculate the total overhead assigned to each product by using
only machine hours to calculate a plantwide rate.
2. Calculate consumption ratios for each activity. (Round to two
decimal places.
3. Calculate a rate for each activity by using the associated driver.
(Round to two decimal places.

4. Assign the overhead costs to each product by using the activity
rates computed in Requirement 3.
5. CONCEPTUAL CONNECTION Comment on the difference
between the assignment in Requirement 1 and the activity-based
assignment.

Product
Infantry
Special forces
Machine Hours
Setups
300
Receiving Orders Packing Orders
900
20,000
1,600
20,000
100
100
800
Costs
$80,000
$24,000
$18,000
$30,000
Transcribed Image Text:Product Infantry Special forces Machine Hours Setups 300 Receiving Orders Packing Orders 900 20,000 1,600 20,000 100 100 800 Costs $80,000 $24,000 $18,000 $30,000
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