Question

Flynn Industries has three activity cost pools and two products. It expects to produce 2,560 units of Product BC113 and 1,220 of Product AD908. Having identified its activity cost pools and the cost drivers for each pool, Flynn 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 Pools Cost Drivers Estimated Overhead Expected Use of Cost Drivers per Activity Product BC113 Product AD908 Machine setup Setups $17,015 41 24 17 Machining Machine hours 105,252 5,012 1,120 3,892 Packing Orders 29,799 473 187 286 Using the above data, do the following: Prepare a schedule showing the computations of the activity-based overhead rates per cost driver. Activity Cost Pools Estimated Overhead Expected Use of Cost Drivers per Activity Activity-Based Overhead Rates Machine setup $ setups $ per setup Machining machine hours $ per machine hr. Packing orders $ per order $ LINK TO TEXT Prepare a schedule assigning each activity’s overhead cost to the two products. BC113 AD908 Activity Cost Pools Expected Use of Cost Drivers per Product Activity-Based Overhead Rates Cost Assigned Expected Use of Cost Drivers per Product Activity-Based Overhead Rates Cost Assigned Machine setup $ $ $ $ Machining $ $ Packing $ $ Total assigned costs $ $ LINK TO TEXT Compute the overhead cost per unit for each product. (Round answers to 2 decimal places, e.g. 12.25.) BC113 AD908 Overhead cost per unit $ $ Click if you would like to Show Work for this question: Open Show Work

Answer 1

Solution 1:

Computation of activity rates
Activity	Estimated Overhead Cost	Activity Base	Usage of Activity Base	Activity Rate
						Machine setup	$17,015.00	Setups	41	$415.00	Per Setup
Machining	$105,252.00	Machine hours	5012	$21.00	Per Machine hour
Packing	$29,799.00	Orders	473	$63.00	Per order
Total	$152,066.00

Solution 2:

Assignment of overhead to Products
Activity cost pools	BC 113			AD908
	Expected use of cost drivers per product	Activity based overhead rates	Cost assigned	Expected use of cost drivers per product	Activity based overhead rates	Cost assigned
Machine setup	24	$415.00	$9,960.00	17	$415.00	$7,055.00
Machining	1120	$21.00	$23,520.00	3892	$21.00	$81,732.00
Packing	187	$63.00	$11,781.00	286	$63.00	$18,018.00
Total			$45,261.00			$106,805.00

Solution 3:

Computation of overhead cost per unit
Particulars	BC113	AD908
Overhead assigned	$45,261.00	$106,805.00
Nos of units	2560	1220
Overhead per unit	$17.68	$87.55