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In: Accounting

Production Inc. uses activity based costing. The following estimated activity costs are identified in the table...

Production Inc. uses activity based costing. The following estimated activity costs are identified in the table below. In addition, they have two product lines, A100 and B100.

Activity Cost Cost Driver A100 B100 Cost allocation base
Setup $85,600 # of setups 1,600 1,750 16,000
Handling $136,500 # of parts 1,480 360 65,000
Assembly $126,000 Direct Labor Hours 800 365 5,000
Total $348,100
Summary of prime costs: A100 B100
Direct materials $16,000 $9,500
Direct labor $13,400 $12,700


Calculate the unit cost for the two products, A100 and B100.
Do not enter dollar signs or commas in the input boxes.
Round Activity Rate to 2 decimal places. Round all other answers to the nearest whole number.

Activity Cost Cost allocation base Activity Rate
Setup $Answer Answer $Answer
Handling $Answer Answer $Answer
Assembly $Answer Answer $Answer
Total $Answer $Answer
A100 B100
Cost Type Activity amount Cost Amount Activity amount Cost Amount
Direct materials $Answer $Answer
Direct labor $Answer $Answer
Setup Answer $Answer Answer $Answer
Handling Answer $Answer Answer $Answer
Assembly Answer $Answer Answer $Answer
Total $Answer $Answer

Solutions

Expert Solution

Activity Cost Cost Driver A100 B100 Cost allocation base
Setup 85,600 # of setups 1,600 1,750 16,000
Handling 136,500 # of parts 1,480 360 65,000
Assembly 126,000 Direct Labor Hours 800 365 5,000
Total 348,100
Activity Cost Cost allocation base Acitivity Rate
Setup 85,600 16,000 5.35
Handling 136,500 65,000 2.10
Assembly 126,000 5,000 25.20
Total 348,100
A100 B100 Acitivity Rate
Activity Activity Amount Cost Amount Activity Amount Cost Amount
Direct Material                     16,000.0           9,500.0
Direct Labor                     13,400.0         12,700.0 5.35
Setup 1,600                       8,560.0 1,750           9,362.5 (Activity Rate* Activity Usage) 2.10
Handling 1,480                       3,108.0 360              756.0 25.20
Assembly 800                     20,160.0 365           9,198.0
Total                     61,228.0 41516.5

ekkarill92 answered 2 years ago
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