FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Activity-Based Costing: Factory Overhead Costs
The total factory overhead for Bardot Marine Company is budgeted for the year at $1,207,500, divided into four activities: fabrication, $595,000; assembly, $266,000; setup, $189,000; and inspection, $157,500. Bardot Marine manufactures two
types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:
Inspection
Speedboat
Bass boat
Fabrication
Assembly
462
525 setups
Each product is budgeted for 7,500 units of production for the year.
a. Determine the activity rates for each activity.
17 per direct labor hour
7 per direct labor hour
Setup
Inspection
Fabrication
8,750 dlh
$
$
Speedboat
Bass boat
Assembly Setup
28,500 dlh
9,500
38,000 dlh
26,250
35,000 dlh
63 setups
360 per setup
180 per inspection
b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.
$
per unit
$
per unit
109 inspections
766
875 inspections
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Transcribed Image Text:Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,207,500, divided into four activities: fabrication, $595,000; assembly, $266,000; setup, $189,000; and inspection, $157,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Inspection Speedboat Bass boat Fabrication Assembly 462 525 setups Each product is budgeted for 7,500 units of production for the year. a. Determine the activity rates for each activity. 17 per direct labor hour 7 per direct labor hour Setup Inspection Fabrication 8,750 dlh $ $ Speedboat Bass boat Assembly Setup 28,500 dlh 9,500 38,000 dlh 26,250 35,000 dlh 63 setups 360 per setup 180 per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. $ per unit $ per unit 109 inspections 766 875 inspections
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