Cost behaviour, activity-based costing, capacity usage. Finn and Sawyer Company employs five individuals for its bill-processing activity.
Question:
Cost behaviour, activity-based costing, capacity usage. Finn and Sawyer Company employs five individuals for its bill-processing activity. Each of the employees is paid an annual salary of $36,000. The budgeted annual activity output of bill processing is 6,000 bills per employee. All other costs in the bill-processing activity are variable and are budgeted at
$27,000 for the year. During the year, 26,000 bills were actually processed.
Required 1. Calculate the budgeted fixed rate, budgeted variable rate, and the budgeted rate for bill¬
processing activity.
2. Compute the total capacity available in bill-processing activity in units.
3. Compute the unused capacity in bill-processing activity in units.
4. Calculate the total cost of bill-processing capacity supplied, the cost of used capacity of bill-processing activity, and the cost of unused capacity of bill-processing 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