Chapter 4 E Calculator eBook 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 1. EX.04.01 follows: 2. EX.04.02 Budgeted Activity Activity Cost Activity Base 3. EX.04.06 Casting $338,910 Machine hours 4. EX.04.11.ALGO Assembly Direct labor hours 163,940 27,500 Number of inspections Inspecting Number of setups Setup 34,250 Materials handling Number of loads 38,400 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 Dining Entry Total Machine hours 5,440 4,830 10,270 4,680 Direct labor hours 7,030 11,710 Number of inspections 1,900 600 2,500 Number of setups 200 50 250 Number of loads 760 200 960 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 per machine hour Assembly per direct labor hour Inspecting 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. Total Activity Cost Activity Cost Per Unit Product Entry Lighting Fixtures Dining Room Lighting Fixtures Previous Check My Work Progress: 4/4 items

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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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
Budgeted
Activity Cost

Activity Base
Casting $338,910   Machine hours
Assembly 163,940   Direct labor hours
Inspecting 27,500   Number of inspections
Setup 34,250   Number of setups
Materials handling 38,400   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 5,440   4,830   10,270  
Direct labor hours 4,680   7,030   11,710  
Number of inspections 1,900   600   2,500  
Number of setups 200   50   250  
Number of loads 760   200   960  
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 $ per machine hour
Assembly $ per direct labor hour
Inspecting $ 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 $ $
Chapter 4
E Calculator
eBook
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
1. EX.04.01
follows:
2. EX.04.02
Budgeted
Activity
Activity Cost Activity Base
3. EX.04.06
Casting
$338,910
Machine hours
4. EX.04.11.ALGO
Assembly
Direct labor hours
163,940
27,500
Number of inspections
Inspecting
Number of setups
Setup
34,250
Materials handling
Number of loads
38,400
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
Dining
Entry
Total
Machine hours
5,440
4,830
10,270
4,680
Direct labor hours
7,030
11,710
Number of inspections
1,900
600
2,500
Number of setups
200
50
250
Number of loads
760
200
960
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
per machine hour
Assembly
per direct labor hour
Inspecting
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.
Total Activity Cost
Activity Cost Per Unit
Product
Entry Lighting Fixtures
Dining Room Lighting Fixtures
Previous
Check My Work
Progress: 4/4 items
Transcribed Image Text:Chapter 4 E Calculator eBook 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 1. EX.04.01 follows: 2. EX.04.02 Budgeted Activity Activity Cost Activity Base 3. EX.04.06 Casting $338,910 Machine hours 4. EX.04.11.ALGO Assembly Direct labor hours 163,940 27,500 Number of inspections Inspecting Number of setups Setup 34,250 Materials handling Number of loads 38,400 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 Dining Entry Total Machine hours 5,440 4,830 10,270 4,680 Direct labor hours 7,030 11,710 Number of inspections 1,900 600 2,500 Number of setups 200 50 250 Number of loads 760 200 960 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 per machine hour Assembly per direct labor hour Inspecting 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. Total Activity Cost Activity Cost Per Unit Product Entry Lighting Fixtures Dining Room Lighting Fixtures Previous Check My Work Progress: 4/4 items
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