Question

Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:

Product	Machine Hours			Setups			Receiving Orders			Packing Orders
Infantry		20,000			300			900			1,600
Special forces		20,000			100			100			800
Costs		$80,000			$24,000			$18,000			$30,000

Required:

1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate.
2. Calculate consumption ratios for each activity. (Round to two decimal places.)
3. Calculate a rate for each activity by using the associated driver. (Round to two decimal places.)
4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3.
5. Conceptual Connection Comment on the difference between the assignment in Requirement 1 and the activity-based assignment.

Answer 1