Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:Activity. Budgeted activity costProduction. $489,900Setup. 117,600Inspection. 105,600Shipping. 144,300Customer service. 65,500 Total. $ 922,900The activity bases identified for each activity are as follows:Activity. Activity base. Production. Machine hoursSetup. Number of set upsInspection. Number of InspectionsShipping. Number of customer orders.Customer service. Number of customer service requests. The activity bases usage Quantities and units produced for the three products were determined from corporate records and are as follows:(Image 1) Step 2 in (image 2) eBookPrint ItemCustomerNumber ofNumber ofNumber ofServiceSetupsCustomer OrdersMachine HoursInspectionsRequests UnitsWhite sugar3,1208024074050 7,800Brown sugaГ1,9901103602,040320 4,975Powdered sugar1,990110600920130 4,975Total7,1003001,2003,700500 17,750Each product requires 0.9 machine hour per unit.Required:If required, round all per unit amounts to the nearest cent.1. Determine the activity rate for each activity.Productionper machine hourSetupInspectionper moveShippingper cust, ord.Customer serviceper customer service request2. Determine the total and per-unit activity cost for all three products.Total Activity CostActivity Cost Per UnitWhite sugar%24%24%24 akeAssignmentSessionLocator3&eBookPrint ItemTotal7,1003001,2003,700500 17,750Each product requires 0.9 machine hour per unit.Required:If required, round all per unit amounts to the nearest cent.1. Determine the activity rate for each activity.Production$4per machine hourSetup$4per setupInspection$4per moveShippingper cust. ord.Customer serviceper customer service request2. Determine the total and per-unit activity cost for all three products.Total Activity CostActivity Cost Per UnitWhite sugarBrown sugarPowdered sugar3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit?The unit costs are different because the products consume many activities in ratios different from the volume%24%24%24%24%24%24

Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity. Budgeted activity cost Production. $489,900 Setup. 117,600 Inspection. 105,600 Shipping. 144,300 Customer service. 65,500 Total. $ 922,900 The activity bases identified for each activity are as follows: Activity. Activity base. Production. Machine hours Setup. Number of set ups Inspection. Number of Inspections Shipping. Number of customer orders. Customer service. Number of customer service requests. The activity bases usage Quantities and units produced for the three products were determined from corporate records and are as follows: (Image 1) Step 2 in (image 2)

Quickbooks Online Accounting

3rd Edition

ISBN:9780357391693

Author:Owen

Publisher:Owen

Chapter5: Operating Activities: Purchases And Cash Payments

Section: Chapter Questions

Problem 2.1C

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Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

Activity. Budgeted activity cost

Production. $489,900

Setup. 117,600

Inspection. 105,600

Shipping. 144,300

Customer service. 65,500

Total. $ 922,900

The activity bases identified for each activity are as follows:

Activity. Activity base.

Production. Machine hours

Setup. Number of set ups

Inspection. Number of Inspections

Shipping. Number of customer orders.

Customer service. Number of customer service requests.

The activity bases usage Quantities and units produced for the three products were determined from corporate records and are as follows:

(Image 1)

Step 2 in (image 2)

eBook
Print Item
Customer
Number of
Number of
Number of
Service
Setups
Customer Orders
Machine Hours
Inspections
Requests Units
White sugar
3,120
80
240
740
50 7,800
Brown sugaГ
1,990
110
360
2,040
320 4,975
Powdered sugar
1,990
110
600
920
130 4,975
Total
7,100
300
1,200
3,700
500 17,750
Each product requires 0.9 machine hour per unit.
Required:
If required, round all per unit amounts to the nearest cent.
1. Determine the activity rate for each activity.
Production
per machine hour
Setup
Inspection
per move
Shipping
per cust, ord.
Customer service
per customer service request
2. Determine the total and per-unit activity cost for all three products.
Total Activity Cost
Activity Cost Per Unit
White sugar
%24
%24
%24

akeAssignmentSessionLocator3&
eBook
Print Item
Total
7,100
300
1,200
3,700
500 17,750
Each product requires 0.9 machine hour per unit.
Required:
If required, round all per unit amounts to the nearest cent.
1. Determine the activity rate for each activity.
Production
$4
per machine hour
Setup
$4
per setup
Inspection
$4
per move
Shipping
per cust. ord.
Customer service
per customer service request
2. Determine the total and per-unit activity cost for all three products.
Total Activity Cost
Activity Cost Per Unit
White sugar
Brown sugar
Powdered sugar
3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit?
The unit costs are different because the products consume many activities in ratios different from the volume
%24
%24
%24
%24
%24
%24

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