Question

Weber Industries has three activity cost pools and two products. It expects to produce 3,000 units of Product BC113 and 1,400 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Weber accumulated the following data relative to those activity cost pools and cost drivers. Annual Overhead Data Expected Use of Cost Drivers per Product Activity Cost Pool Cost Drivers Estimated Overhead Expected Use of Cost Drivers per Activity Product BC113 Product AD908 Machine set-up Set-ups $ 18,780 41 26 15 Machining Machine hours 109,180 5,170 1,034 4,136 Packing Orders 31,710 480 144 336

Prepare a schedule showing the calculations of the activity-based overhead rates per cost driver. (Round rates per cost driver to 2 decimal places, e.g. 15.25.) Cost Pool Estimated MOH Estimated Usage Rate Machine set-up $ $ per set-up Machining $ $ per machine hr. Packing $ $ per order

Prepare a schedule assigning each activity’s overhead cost to the two products. (Round answers to 0 decimal places, e.g. 1,525.) Assignment of overhead: BC113 AD908 Machine set-up $ $ Machining $ $ Packing $ $ Overhead assigned $ $

Calculate the overhead cost per unit for each product. (Round answers to 2 decimal places, e.g. 15.25.) BC113 AD908 Overhead cost per unit $ $

Answer 1

Schedule showing the calculations of the activity-based overhead rates per cost driver

Cost Pool	Estimated MOH	Estimated Usage	Rate
	(a)	(b)	(a)/(b)
Machine set-up	$18,780	41 set-ups	$458.05 per set-up
Machining	$109,180	5,170 machine hours	$21.12 per machine hour
Packaging	$31,710	480 orders	$66.06 per order

Schedule assigning each activity’s overhead cost to the two products

Assignment of Overhead	BC113	AD908
Machine Set-up	$11,909	$6,871
(rate x expected usage by each product)	($458.05 x 26)	($458.05 x 15)
Machining	$21,838	$87,352
	($21.12 x 1,034)	($21.12 x 4,136)
Packing	$9,513	$22,196
	($66.06 x 144)	($66.06 x 336)
Overhead assigned	$43,260	$116,419

Calculation of overhead cost per unit of each product

	BC113	AD908
a)Total overhead assigned	$43,260	$116,419
b)No. of units expected to produce	3,000 units	1,400 units
c)Cost per unit (a/b)	$14.42 per unit	$83.16 per unit
	($43,260/3000 units)	($116,419/1,400 units)