Question

Perkins Cove Yacht's controller developed the following data for use in activity-based costing (method D):

Manufacturing Overhead	Amount	Cost Driver	Goose Rocks	Kennebunkport	Ogunquit
Depreciation	$3,200,000	Square Feet	50,000	30,000	30,000
Maintenance	$1,800,000	Direct Labor Hours	180,000	143,000	148,500
Purchasing	$320,000	# of Purchase Orders	2,500	1,500	9,000
Inspection	$850,000	# of Inspections	1,000	850	3,500
Indirect Materials	$490,000	Units Manufactured	150	110	25
Supervision	$1,700,000	# of Inspections	1,000	850	3.500
Supplies	$190,000	Units Manufactured	150	110	25
Total	$8,550,000

Use activity-based costing to allocate the costs of overhead per unit and in total to each yacht. Show all supporting calculations

Answer 1

Overhead	Amount	Cost driver	Rate	Cost Driver	Goose Rocks	Kennebunkport	Ogunquit
Depreciation	3,200,000	110,000	29.09	Square ft	50,000.00	30,000.00	30,000.00
Maintenance	1,800,000	471,500	3.82	Direct labor hours	180,000.00	143,000.00	148,500.00
Purchasing	320,000	13,000	24.62	# of Pos	2,500.00	1,500.00	9,000.00
Inspection	850,000	5,350	158.88	# of Inspections	1,000.00	850.00	3,500.00
Indirect materials	490,000	285	1,719.30	Units Manufactured	150.00	110.00	25.00
Supervision	1,700,000	1,854	917.18	# of Inspections	1,000.00	850.00	3.50
Supplies	190,000	285	666.67	Units Manufactured	150.00	110.00	25.00

Goose Rocks	Activity driver	Rate of OH	OH applied
Square ft	50000	29.09	1,454,545.45
Direct labor hours	180000	3.82	687,168.61
# of Pos	2500	24.62	61,538.46
# of Inspections	1000	158.88	158,878.50
Units Manufactured	150	1,719.30	257,894.74
# of Inspections	1000	917.18	917,183.71
Units Manufactured	150	666.67	100,000.00
Total OH			3,637,209.47
Units			150
Per unit			24248.06317

Kennebunkport	Activity driver	Rate of OH	OH applied
Square ft	30000	29.09	872,727.27
Direct labor hours	143000	3.82	545,917.29
# of Pos	1500	24.62	36,923.08
# of Inspections	850	158.88	135,046.73
Units Manufactured	110	1,719.30	189,122.81
# of Inspections	850	917.18	779,606.15
Units Manufactured	110	666.67	73,333.33
Total OH			2,632,676.65
Units			110.00
Per unit			23,933.42

Ogunquit	Activity driver	Rate of OH	OH applied
Square ft	30000	29.09	872,727.27
Direct labor hours	148500	3.82	566,914.10
# of Pos	9000	24.62	221,538.46
# of Inspections	3500	158.88	556,074.77
Units Manufactured	25	1,719.30	42,982.46
# of Inspections	3.5	917.18	3,210.14
Units Manufactured	25	666.67	16,666.67
Total OH			2,280,113.87
Units			25.00
Per unit			91,204.55