a
Allocate the cost of inspection among the products by assuming that it is driven by unit-level activities.
a
Explanation of Solution
The calculation of the allocation rate is as follows:
Hence, the allocation rate per direct labor hour is $20.
The calculation of the total cost allocated for high-caliber boards is as follows:
Hence, the allocated cost for high-caliber boards is 80,000.
The calculation of the total cost allocated for low-caliber boards is as follows:
Hence, the allocated cost for low-caliber boards is $280,000.
b
Allocate the cost of inspection among the products by assuming that it is driven by batch-level activities.
b
Explanation of Solution
The calculation of allocation rate is as follows:
Hence, the allocation rate per batch is $9,000.
The calculation of the total cost allocated for high-caliber boards is as follows:
Hence, the allocated cost for high-caliber boards is $180,000.
The calculation of the total cost allocated for low-caliber boards is as follows:
Hence, the allocated cost for low-caliber boards is $180,000.
c
Allocate the cost of inspection among the products by assuming it is driven by product-level activities.
c
Explanation of Solution
The calculation of the allocation rate is as follows:
Hence, the allocation rate per inspector is $72,000.
The calculation of the total cost allocated for high-caliber boards is as follows:
Hence, the allocated cost for high-caliber boards is $216,000.
The calculation of the total cost allocated for low-caliber boards is as follows:
Hence, the allocated cost for low-caliber boards is $144,000.
d
Allocate the cost of inspection among the products by assuming that it is driven by facility-level activities.
d
Explanation of Solution
The calculation of the allocation rate is as follows:
Hence, the allocation rate per square feet is $3.60.
The calculation of the total cost allocated for high-caliber boards is as follows:
Hence, the allocated cost for high-caliber boards is $108,000.
The calculation of the total cost allocated for low-caliber boards is as follows:
Hence, the allocated cost for low-caliber boards is $252,000.
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