ABC and capacity usage. The controller of Harris Corporation has collected the following data for two activities.
Question:
ABC and capacity usage. The controller of Harris Corporation has collected the following data for two activities. Harris calculates activity cost rates based on cost driver capacity.
Activity Cost Driver Capacity Cost Power Kilowatt hours 50,000 kilowatt hours $240,000 Quality inspection Number ofinspections 10,000 inspections 360,000 The company makes two products: Tulsa and Okla. For the year just ended, the following consumption of cost driver was reported:
Product Kilowatt hours Quality Inspections Tulsa 10,000 5,000 Okla 35,000 4,000 Required 1. Compute the total amount of costs allocated to both products from each activity.
2. Calculate the cost of unused capacity for each activity.
Step by Step Answer:
Cost Accounting A Managerial Emphasis
ISBN: 9780131971905
4th Canadian Edition
Authors: Charles T. Horngren, George Foster, Srikant M. Datar, Howard D. Teall