In: Accounting
Use the following data for problems #1 & #2:
Belsky Corporation manufactures x-ray machines and has provided the following data from its activity-based costing system:
Activity Cost Pool |
Total Cost |
Total Activity |
|
Assembly |
$315,000 |
30,000 |
machine-hours |
Processing orders |
$49,000 |
1,400 |
orders |
Inspection |
$77,000 |
1,100 |
inspection-hours |
1. Calculate an activity rate for each of Belsky’s three activities that it would use in the final stage of allocating costs to its products. (Hint: See Exhibit 7-7 on page 323 of the text for an example.)
2. Each year Belsky makes 500 units of its X-ray Machines requiring a total of 1,000 machine-hours, 60 orders, and 20 inspection-hours per year. In addition to the costs allocated through the activity pool, the product's direct materials cost is $50 per unit and its direct labor cost is $20 per unit.
Use this information and the activity rates calculated in Problem #1 to find the Unit Cost for one X-ray Machine. (Hint: Your final answer must give the total unit cost for one x-ray machine not the total cost of 500 machines!)