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 $280,000 Machine hours Assembly 159,600 Direct labor hours Inspecting 26,400 Number of inspections Setup 37,250 Number of setups Materials handling 43,860 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 Entry Dining Total Machine hours 5,300 4,700 10,000 Direct labor hours 4,560 6,840 11,400 Number of inspections 1,820 580 2,400 Number of setups 200 50 250 Number of loads 810 210 1,020 Units produced 10,600 5,300 15,900 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Dawson Company manufactures small table lamps and desk lamps. The following shows the activities per product and the total overhead information: Units Setups Inspections Assembly (dlh) 2,700 4,000 8,000 8,000 Small table lamps Desk lamps Activity Setups 9,150 15,250 44,400 44,400 Total Activity-Base Usage Budgeted Activity Cost 12,000 $102,000 24,400 129,320 77,700 310,800 Inspections Assembly (dlh) The total factory overhead to be allocated to desk lamps is Oa. $456,995 Ob. $228,498 Oc. $587,565 Od. $326,425

Riverbed Manufacturing has five activity cost pools and two products (a budget tape vacuum and a deluxe tape vacuum). Information is presented below: Activity Cost Pools Ordering and Receiving Machine Setup Machining Assembly Inspection Budget $ Cost Driver Orders Setups Machine hours Deluxe $ Parts Inspections Overhead cost per unit Est. Overhead $144,000 311,400 1,023,000 1,624,000 314,000 per unit Est. Use of Cost Drivers Budget per unit 600 500 150,000 1.200,000 550 Deluxe 400 Compute the overhead cost per unit for each product. Production is 700.000 units of Budget and 200.000 units of Deluxe. (Round per machine hour and per part values to 3 decimal places, eg 52.711. Round overhead cost per unit to 2 decimal places, e.g. 12.25 and cost assigned to 0 decimal places, eg. 2,500.) 400 100,000 800,000 450

Required Information [The following information applies to the questions displayed below.] The Platter Valley factory of Bybee Industries manufactures field boots. The cost of each boot includes direct materials, direct labor, and manufacturing (factory) overhead. The firm traces all direct costs to products, and it assigns overhead cost to products based on direct labor hours. The company budgeted $15,000 variable factory overhead cost, $90,000 for fixed factory overhead cost and 2,500 direct labor hours (its practical capacity) to manufacture 5,000 pairs of boots in March. The factory used 2,700 direct labor hours in March to manufacture 4,800 pairs of boots and spent $15,600 on variable overhead during the month. The actual fixed overhead cost incurred for the month was $92,000. The Platter Valley factory of Bybee Industries uses a two-variance analysis of the total factory overhead variance. Required: 1. Compute the total flexible-budget variance for overhead and the production…

Activity-Based Costing: Factory Overhead Costs NOORGOGUO The total factory overhead for Bardot Marine Company is budgeted for the year at $1,205,100, divided into four activities: fabrication, $528,000; assembly, $192,000; setup, $262,350; and inspection, $222,750. 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: Fabrication 8,250 dih 24,750 33,000 dih Assembly 24,000 dih 8,000 32,000 din 495 setups Each product is budgeted for 6,000 units of production for the year. a. Determine the activity rates for each activity. Fabrication per direct labor hour Assembly per direct labor hour Setup per setup. Inspection per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat Bass boat Speedboat Bass boat per unit per unit Setup 59 setups 436 Inspection 103 inspections 722 825 inspections

Activity-Based Costing Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities-production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 44,000 Number of setups Procurement 13,500 Number of purchase orders (PO) Quality control 97,500 Number of inspections Materials management 84,000 Number of components Total $239,000 The activity-base usage quantities for each product are as follows: Purchase Setups Inspections Components Unit Volume Orders Custom 290 760 1,200 500 2,000 Standard 110 140 300 200 2,000 400 900 1,500 700 4,000 Total a. Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control Materials Management Activity cost + Activity base /setup /PO $ /inspection…

Indirect Cost Allocation: Direct Method Sprint Manufacturing Company has two production departments, Melting and Molding. Direct general plant management and plant security costs benefit both production departments. Sprint allocates general plant management costs on the basis of the number of production employees and plant security costs on the basis of space occupied by the production departments. In November, the following overhead costs were recorded: Melting Department overhead $110,000 Molding Department overhead 400,000 General plant management 100,000 Plant security 50,000 Other pertinent data follow:   Melting Molding Number of employees 35 40 Space occupied (square feet) 10,000 20,000 Machine hours 10,000 2,000 Direct labor hours 4,000 20,000   a. Prepare a schedule allocating general plant management costs and plant security costs to the Meltingand Molding Departments.   Department Total Melting…

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: Activity Casting Assembly Inspecting Setup Materials handling Activity Base Machine hours Direct labor hours Number of inspections Number of setups Number of loads Units produced Budgeted Activity Cost Activity Base Corporate records were obtained to estimate the amount c activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Entry Dining Total 5,440 4,830 10,270 4,680 7,030 11,710 1,870 590 2,460 270 810 10,800 Activity Casting Assembly Inspecting Setup Materials handling a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Rate $ $ $ $225,940 Machine hours 222,490 39,360 46,860 50,470 $ Direct…

Activity Base Entry Dining Total Machine hours 5,320 4,710 10,030 Direct labor hours 4,570 6,860 11,430 Number of inspections 1,940 610 2,550 Number of setups 310 70 380 Number of loads 700 190 890 Units produced 10,600 5,300 15,900 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting per machine hour Assembly per direct labor hour Inspecting 24 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-Based Costing Zeus Industries manufactures two types of electrical power units, custom and standard, which involve four factory overhead activities—production setup, procurement, quality control, and materials management. An activity analysis of the overhead revealed the following estimated activity costs and activity bases for these activities: Activity Activity Cost Activity Base Production setup $ 44,000   Number of setups Procurement 13,500   Number of purchase orders (PO) Quality control 97,500   Number of inspections Materials management 84,000   Number of components Total $239,000     The activity-base usage quantities for each product are as follows:   Setups PurchaseOrders Inspections Components Unit Volume Custom 290   760   1,200   500   2,000   Standard 110   140   300   200   2,000   Total 400   900   1,500   700   4,000   a.  Determine an activity rate for each activity. Activity Rates Production Setup Procurement Quality Control…