Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting $296,640 Machine hours Assembly 190,260 Direct labor hours Inspecting 29,100 Number of inspections Setup 53,900 Number of setups Materials handling 44,690 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Machine hours Direct labor hours Entry Dining Total 4,910 4,360 9,270 4,230 6,340 10,570

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Activity Rate
Activity
Casting
Assembly
Inspecting
$
per machine hour
per direct labor hour
per inspection
Setup
per setup
Materials handling
per load
b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.
Product
Total Activity Cost Activity Cost Per Unit
$
Entry Lighting Fixtures
Dining Room Lighting Fixtures
Transcribed Image Text:a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Rate Activity Casting Assembly Inspecting $ per machine hour per direct labor hour per inspection Setup per setup Materials handling per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Product Total Activity Cost Activity Cost Per Unit $ Entry Lighting Fixtures Dining Room Lighting Fixtures
Activity Rates and Product Costs using Activity-Based Costing
Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted
activity costs and activity bases are as follows:
Budgeted
Activity Cost Activity Base
Machine hours
Direct labor hours
Number of inspections
Number of setups
Number of loads
Activity
Casting
Assembly
Inspecting
Setup
Materials handling
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced
follow:
Activity Base
Machine hours
Direct labor hours
Number of inspections
Number of setups
Number of loads
Units produced
$296,640
190,260
29,100
53,900
44,690
Entry Dining Total
4,910 4,360
9,270
4,230 6,340 10,570
1,470
470
1,940
280
350
860
70
230
1,090
9,800 4,900 14,700
Transcribed Image Text:Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Budgeted Activity Cost Activity Base Machine hours Direct labor hours Number of inspections Number of setups Number of loads Activity Casting Assembly Inspecting Setup Materials handling Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Machine hours Direct labor hours Number of inspections Number of setups Number of loads Units produced $296,640 190,260 29,100 53,900 44,690 Entry Dining Total 4,910 4,360 9,270 4,230 6,340 10,570 1,470 470 1,940 280 350 860 70 230 1,090 9,800 4,900 14,700
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