Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures.
Question:
Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:
Activity Activity Cost Activity Base
Casting……………..$560,000…………………..Machine hours
Assembly……………..75,000……………….Direct labor hours
Inspecting……………..30,000…………Number of inspections
Setup………………….18,750………………Number of setups
Materials handling…….14,000……………….Number of loads
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:
A. Determine the activity rate for each activity.
B. Use the activity rates in (A) to determine the total and per-unit activity costs associated with each product.
Step by Step Answer:
Financial And Managerial Accounting
ISBN: 9781337119207
14th Edition
Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac