Activity Rates and Product Costs using Activity-Based Costing Garfield 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 Budgeted Activity Cost Activity Base Casting $254,000   Machine hours Assembly 196,860   Direct labor hours Inspecting 28,000   Number of inspections Setup 30,960   Number of setups Materials handling 44,500   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 5,380   4,780   10,160   Direct labor hours 4,630   6,950   11,580   Number of inspections 1,520   480   2,000   Number of setups 190   50   240   Number of loads 700   190   890   Units produced 10,800   5,400   16,200   a.  Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate   Casting $fill in the blank 1 per machine hour Assembly $fill in the blank 2 per direct labor hour Inspecting $fill in the blank 3 per inspection Setup $fill in the blank 4 per setup Materials handling $fill in the blank 5 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 rates to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures $fill in the blank 6 $fill in the blank 7 Dining Room Lighting Fixtures $fill in the blank 8 $fill in the blank 9

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…

Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 281,000     Number of parts   Material insertion   3,060,000     Number of parts   Automated machinery   873,000     Machine hours   Finishing   194,000     Direct labor hours   Packaging   194,000     Orders shipped   Total $ 4,602,000           The following information pertains to the three product lines for next year:   Economy   Standard   Deluxe Units to be produced   14,300       9,700       2,600   Orders to be shipped   1,910       580       270   Number of parts per unit   15       20       25   Machine hours per unit   1       2       5   Labor hours per unit   3       3       3       What is Barnett’s pool rate…

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) Small table lamps 3,800 3,700 8,250 42,400 Desk lamps 7,800 7,400 13,750 42,400 ETT Activity Total Activity-Base Usage Budgeted Activity Cost Setups 11,100 $108,780 Inspections 22,000 110,000 Assembly (dlh) 74,200 363,580 The total factory overhead to be allocated to desk lamps is Oa, $488,642 Ob, $593,351 Oc. $209.418 Od. $349,030

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…

Activity Rates and Product Costs using Activity-Based Costing Garfield 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 BudgetedActivity Cost Activity Base Casting $560,000   Machine hours Assembly 75,000   Direct labor hours Inspecting 30,000   Number of inspections Setup 18,750   Number of setups Materials handling 14,000   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 7,500   12,500   20,000   Direct labor hours 2,000   3,000   5,000   Number of inspections 500   250   750   Number of setups 150   100   250   Number of loads 400   300   700   Units produced 5,000   2,500   7,500     a.…

XYZ Co. manufactures three types of remote-control devices: X, Y, and Z. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $225,000 Number of parts Material insertion 2,475,000 Number of parts Automated machinery 840,000 Machine hours Finishing 170,000 Direct labor hours Packaging 170,000 Orders shipped Total $3,880,000 The following information pertains to the three product lines for next year: Y Units to be produced 10,000 5,000 2,000 Orders to be shipped 1,000 500 200 Number of parts per unit 10 15 25 Machine hours per unit 3 Labor hours per unit 2 What is pool rate for the automated machinery activity? Oa. $50.00 per machine hour.