Activity-Based Costing Quality Cuts Inc. has total estimated factory overhead for the year of $204,000, divided into four activities: cutting, $81,000; sewing, $25,500; setup $60,000; and inspection, $37,500. Quality Cuts manufactures two types of men's pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows: Cutting Sewing Setup Inspection Jeans 500 dlh 1,000 dlh 250 setups 100 inspections Khakis 1,000 500 750 400 1,500 dlh 1,500 dlh 1,000 setups 500 inspections Each product is budgeted for 10,000 units of production for the year. a. Determine the activity rates for each activity. Cutting per dlh Sewing per dlh Setup per setup Inspection per inspection b. Determine the factory overhead cost per unit for each product, using activity-based costing. Round your answers to two decimal places. Jeans Khakis

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Activity-Based Costing
Quality Cuts Inc. has total estimated factory overhead for the year of $204,000, divided into four activities: cutting, $81,000; sewing, $25,500; setup,
$60,000; and inspection, $37,500. Quality Cuts manufactures two types of men's pants: jeans and khakis. The activity-base usage quantities for each
product by each activity are as follows:
Cutting
Sewing
Setup
Inspection
Jeans
500 dlh
1,000 dlh
250 setups
100 inspections
Khakis
1,000
500
750
400
1,500 dlh
1,500 dlh
1,000 setups
500 inspections
Each product is budgeted for 10,000 units of production for the year.
a. Determine the activity rates for each activity.
Cutting
per dlh
Sewing
per dlh
Setup
per setup
Inspection
per inspection
b. Determine the factory overhead cost per unit for each product, using activity-based costing. Round your answers to two decimal places.
Jeans
Khakis
Transcribed Image Text:Activity-Based Costing Quality Cuts Inc. has total estimated factory overhead for the year of $204,000, divided into four activities: cutting, $81,000; sewing, $25,500; setup, $60,000; and inspection, $37,500. Quality Cuts manufactures two types of men's pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows: Cutting Sewing Setup Inspection Jeans 500 dlh 1,000 dlh 250 setups 100 inspections Khakis 1,000 500 750 400 1,500 dlh 1,500 dlh 1,000 setups 500 inspections Each product is budgeted for 10,000 units of production for the year. a. Determine the activity rates for each activity. Cutting per dlh Sewing per dlh Setup per setup Inspection per inspection b. Determine the factory overhead cost per unit for each product, using activity-based costing. Round your answers to two decimal places. Jeans Khakis
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