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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. 

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 The following information pertains to the three product lines for next year: 

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What is Barnett's pool rate for the material-insertion activity?



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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 ago
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