Activity-Based And Department Rate Product Costing and Product Cost Distortions Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: Indirect labor Cutting Department $507,000 156,000 Finishing Department Total 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 Materials handling Total Budgeted Activity Cost Activity Base $237,000 Number of production runs 270,000 $507,000 Number of moves The activity-base usage quantities and units produced for the two products follow O Number of Production Number of Direct Labor Hours-Cutting Direct Labor Hours- Runs Moves Finishing Units Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis 70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Check My Work Previous Next