Question
In: Accounting
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe.
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, Its budgeted cost and related cost driver is identified below.
The following information pertains to the three product lines for next year:
What is Barnett's pool rate for the material-insertion activity?
Solutions
Expert Solution
| WORKING NOTES: | |||||||
| CALCULATION OF NUMBER OF UNITS TO BE INSERTED | |||||||
| Economy | Standard | Deluxe | Total | ||||
| Units to be produced (A) | 11700 | 6700 | 3700 | 22100 | |||
| Number of Parts Per unit(B) | 27 | 32 | 42 | ||||
| Number of parts introduce (AXB) | 315900 | 214400 | 155400 | 685700 | |||
| SOLUTION : | |||||||
| Calculation of the Cost Driver Rate of Material - insertion activity | |||||||
| Cost Driver Rate = Activity Cost / Cost Driver | |||||||
| Activity Cost / Cost Driver = | |||||||
| Activity | Cost Driver | Activity Cost | "/" | Cost Driver | " = " To | Cost Driver Rate | |
| Material insetion activity | No. of parts inserted | $ 24,92,000 | "/" | $ 6,85,700 | " = " To | $ 3.63 | |
| ANSWER = OPTION 1 = $ 3.63 PER PART | |||||||
ekkarill92 answered 2 years agoRelated Solutions
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