Activity$-$Based Costing

Steampunk Corporation has the following predicted indirect costs and cost drivers for the year for the given activity cost pools:

Fabrication

Department Finishing

Department Cost Driver

Maintenance $ $18,0009,000$ Machine hours

Materials handling $27,00013,500$ Material moves

Machine $63,0004,500$ Machine setups

Inspections $-22,500$ Inspection hours

Total $ $108,000$ $ $49,500$

The following activity predictions were also made for the year:

Fabrication

Department Finishing

Department

Machine hours $5,0002,500$

Material moves $1,500750$

Machine setups $35025$

Inspection hours $-500$

It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW$100$ and SG$150.$ The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity$-$based rates. The production manager has provided the following data for the production of a batch of $100$ units for each of these models:

SW$100$ SG$150$

Direct materials cost $ $6,000$ $ $9,000$

Direct labor cost $ $2,400$ $ $1,800$

Machine hours $($Fabrication$)250350$

Machine hours $($Finishing$)10050$

Materials moves $2040$

Machine setups $510$

Inspection hours $1530$

a$.$ Determine the cost of one unit each of SW$100$ and SG$150,$ assuming a company$-$wide overhead rate is used based on total machine hours.

Round rate to two decimal places.

Overhead rate based on total machine hours: $Answer

per machine hour

Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places.

Product Costs per Unit SW$100$ SG$150$

Direct materials Answer

Answer

Direct labor Answer

Answer

Manufacturing overhead Answer

Answer

Total cost per batch Answer

Answer

Number of units per batch Answer

Answer

Cost per unit Answer

Answer

b$.$ Determine the cost of one unit of SW$100$ and SG$150,$ assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments.

Round to two decimal places, if applicable.

Overhead rate based on machine hours for Fabrication Dept.: $Answer

per machine hour.

Overhead rate based on machine hours for Finishing Dept.: $Answer

per machine hour.

Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.

Product Costs per Unit SW$100$ SG$150$

Direct materials Answer

Answer

Direct labor Answer

Answer

Manufacturing overhead:

Fabrication Dept. Answer

Answer

Finishing Dept.

Answer

Answer

Total cost per batch

Answer

Answer

Number of units per batch Answer

Answer

Cost per unit

Answer

Answer

c$.$ Determine the cost of one unit of SW$100$ and SG$150,$ assuming activity$-$based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities.

Round rate to two decimal places, if applicable.

Activity$-$based overhead rates:

Maintenance Answer

Materials handling Answer

Machine setup Answer

Inspection activities Answer

Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed.

Product Costs per Unit SW$100$ SG$150$

Direct materials Answer

Answer

Direct labor Answer

Answer

Manufacturing overhead:

Maintenance activity Answer

Answer

Materials handling activity Answer

Answer

Machine setups activity Answer

Answer

Inspections activity

Answer

Answer

Total cost per batch Answer

Answer

Number of units per batch Answer

Answer

Cost per unit

Answer

Answer