Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures.
Activity Rates and Product Costs using Activity-Based Costing Lonsdale 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: Budgeted Activity Cost Activity Base Activity Casting $570,000 Assembly 80,000 Inspecting Machine hours Direct labor hours Number of inspections Number of setups Number of loads 42,000 38,000 23,750 Setup Materials handling 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: Activity Base Entry Dining Total Machine hours 13,000 19,000 2,000 5,000 Direct labor hours Number of inspections 6,000 3,000 600 300 Number of setups 1,000 500 950 Number of loads 200 500 3,000 450 6,000 Units produced 9,000 a. Determine the activity rate for each activity. Activity Casting Assembly Activity Rate $ 30 $ 16 $ 42 $ 76 $ 25 Inspecting per machine hour per direct labor hour per inspection per setup per load Setup Materials handling b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Product Entry Lighting Fixtures Total Activity Cost $ 287,250 $466,500 Activity Cost Per Unit $ 47.9 x $ 156 x Dining Room Lighting Fixtures
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started