Klamath Corp. produces two products: saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows: Activity Stamping Assembly Setup Activity Base Machine hours Labor hours Number of setups Units produced Budgeted Costs $200,000 400,000 30,000 Saws Drills Saws 4,000 7,000 $ 3 500 Activity Base Machine hours Labor hours Number of setups Drills 6,000 13,000 12 600 a. Determine the activity rate for each activity. Stamping per machine hour Assembly per labor hour Setup per setup b. Determine the factory overhead to be allocated to each unit of product. Round your answers to two decimal places, if necessary. per unit per unit Total 10,000 20,000 15 Previous

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
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Chapter1: Financial Statements And Business Decisions
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Klamath Corp. produces two products: saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows:

| Activity     | Budgeted Costs | Activity Base   |
|--------------|----------------|-----------------|
| Stamping     | $200,000       | Machine hours   |
| Assembly     | 400,000        | Labor hours     |
| Setup        | 30,000         | Number of setups|

| Activity Base   | Saws | Drills | Total |
|-----------------|------|--------|-------|
| Machine hours   | 4,000| 6,000  | 10,000|
| Labor hours     | 7,000| 13,000 | 20,000|
| Number of setups| 3    | 12     | 15    |
| Units produced  | 500  | 600    |       |

a. Determine the activity rate for each activity.

- Stamping: $______ per machine hour
- Assembly: $______ per labor hour
- Setup: $______ per setup

b. Determine the factory overhead to be allocated to each unit of product. Round your answers to two decimal places, if necessary.

- Saws: $______ per unit
- Drills: $______ per unit
Transcribed Image Text:Klamath Corp. produces two products: saws and drills. Three activities are used in their manufacture. These activities and their associated costs and bases are as follows: | Activity | Budgeted Costs | Activity Base | |--------------|----------------|-----------------| | Stamping | $200,000 | Machine hours | | Assembly | 400,000 | Labor hours | | Setup | 30,000 | Number of setups| | Activity Base | Saws | Drills | Total | |-----------------|------|--------|-------| | Machine hours | 4,000| 6,000 | 10,000| | Labor hours | 7,000| 13,000 | 20,000| | Number of setups| 3 | 12 | 15 | | Units produced | 500 | 600 | | a. Determine the activity rate for each activity. - Stamping: $______ per machine hour - Assembly: $______ per labor hour - Setup: $______ per setup b. Determine the factory overhead to be allocated to each unit of product. Round your answers to two decimal places, if necessary. - Saws: $______ per unit - Drills: $______ per unit
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