Activity Based And Department Rate Product Costing and Product Cost Distortions Black and tile Sports Inc, manufactures two products: snowboards and sis. The factory overhead incurred is as follows: Indirect labor Cotting Department Finishing Department Total 3507.000 156,000 192.000 $855,000 The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows: Activity Production control Budgeted Activity Cost 3237.000 270.000 Activity Base Number of production runs Number of moves Total 5507.000 The activitatea and its produced for the trucson Number of Production Huns Number of Moves Units Produced Bwboard 430 70 Direct Labor Hours cutting 4.000 2.000 6,000 5.000 2.500 7.500 0.000 Direct Labor Hours Finishing 2.000 4,000 1.000 Total 6,000 12,000 Skis 70 2,000 4,000 2,500 7.500 Total 500 6,000 12.000 6,000 6.000 Required: 1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total tactory overhead is $335.000 and $540,000 for the cutting and Finishing departments, respectively. Round per unit amounts to the nearest whole cent. Department Production Department Rate Cutting Department per direct labor hour Finishing Department per direct labor hour 2. Determine the total and per unit factory overhead costs allocated to each product, using the multiple production department overhead rain () Round per unit amounts to the nearest whole cent. Product Total Factory Overhead Factory Overhead Per Unit Snowboards 3. Determine the acts, assuming that the indirect laboris associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent Activity Activity Rate Production Control Der prod, ron Material Handling De move Cutting Department perah Finishing Department per 4. Damith total and perco assigned to sath product unde activity based costing. Round the per unit amounts to the nearest whole cent. Product Total Activity Cost Activity Cost Per Unit Finishing Department per direct labor hour 2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rites in (1). Round per unit amounts to the nearest whole cent. Product Total Factory Overhead Factory Overhead Per Unit Snowboards skis 1. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent. Activity Activity Rate Production Control por prod.ru Material Handling per move Cutting Department Der Finishing Department 4. Datermine the total and per unit cost assigned to each product under activity based costing Round the per unit amounts to the nearest whole cent. Product Total Activity Cost Activity Cost Per Unit Snowboards 5 5. Can the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity based costing methods The activity-based overhead allocation reveals that consume more factory overhead on a per-unit basic than do - The method does not show this because will factory sveted is assumed to be proportional to direct labor hours. The method separately accounts for the production control and materials landing activity costs Showboards have more production control and materials tanding activities than do it. This is because scowboards made in matelota, representing de variety of style. The board a higher activity costs per unit thanks per
