Ch 6 H done).docx
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Angelina College *
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2302
Subject
Industrial Engineering
Date
Dec 6, 2023
Type
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2
Uploaded by ProfessorHeron3343
Chapter 6 Homework
1.
Match the activity with the most appropriate cost driver.
Activity
Cost Driver
Fringe benefits
Square feet
Electricity
Direct labor hours
Depreciation
Machine hours
Machine maintenance
Heat and air conditioning
fringe benefits - direct labor hours
electricity - machine hours
depreciation - square feet
machine maintenance - machine hours
heat and air conditioning - square feet
2.
Rex Industries has identified three different activities as cost drivers: machine setups,
machine hours, and inspections. The overhead and estimated usage are:
Compute the overhead rate for each activity.
Activity
Overhead per
Activity
Annual Usage
Overhead Rate
per Activity
Machine
setups
$155,000
4,000
38.75
Machine hours
352,800
14,112
25.00
Inspections
120,750
3,500
34.50
3.
Custom’s has three cost pools and an associated cost driver to allocate the costs to the
product. The cost pools, cost driver, estimated overhead, and estimated activity for the
cost pool are:
What is the predetermined overhead rate for each activity?
material - $3.75 per material requisition
machine -$1.95 per machine hours
inspection - $7.50 per inspection
Chapter 6 Homework
4.
Assign each of the following expenses to either the machine setup cost pool or the
factory cost pool:
a.
indirect materials
machine setup
b.
factory insurance
factory
c.
machine depreciation
factory
d.
machine setup (indirect labor)
machine setup
e.
machine setup (indirect material)
machine setup
5.
Using this information from Planters, Inc., what is the cost per unit under both variable
and absorption costing?
variable - $620
absorption - $740
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