In: Accounting

# Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...

Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $930,200, divided into four activities: fabrication,$420,000; assembly, $156,000; setup,$193,200; and inspection, $161,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 7,000 dlh 19,500 dlh 50 setups 88 inspections Bass boat 21,000 6,500 370 612 28,000 dlh 26,000 dlh 420 setups 700 inspections Each product is budgeted for 6,000 units of production for the year. a. Determine the activity rates for each activity. Fabrication$ 15 per direct labor hour Assembly $6 per direct labor hour Setup$ 449.3 per setup Inspection $230 per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat$ per unit Bass boat $per unit ## Solutions ##### Expert Solution  1. Computation of Activity Rate ABC Costing Activity Overhead (A) Cost Driver Quantity (B) Allocation Rate A/B) Fabrication$420,000.00 28000 DLH $15.00 Per DLH Assembly$156,000.00 26000 DLH $6.00 Per DLH Setup$193,200.00 420 No. of Setup $460.00 per Setup Inspection$161,000.00 700 No. of inspection $230.00 Per inspection Total$930,200.00
 2. Assigning Overhead Cost to Product Model Using ABC Method SpeedBoat Bassboat Activity Based Overhead Rate (A) Cost Driver Incurred (B) OH Allocated (AXB) Cost Driver Incurred ( C) OH Allocated (AXC) Fabrication $15.00 Per DLH 7000 Per DLH$105,000.00 21000 Per DLH $315,000.00 Assembly$6.00 Per DLH 19500 Per DLH $117,000.00 6500 Per DLH$39,000.00 Setup $460.00 per Setup 50 per Setup$23,000.00 370 per Setup $170,200.00 Inspection$230.00 Per inspection 88 Per inspection $20,240.00 612 Per inspection$140,760.00 Total Overhead (A) $265,240.00$664,960.00 No. Of Units (B) 6000 6000 Overhead per Unit (A/B) $44.21$110.83