Activity-Based Costing: Factory Overhead Costs

The total factory overhead for Bardot Marine Company is budgeted for the year at $715,950, divided into four activities: fabrication, $342,000; assembly, $126,000; setup, $133,950; and inspection, $114,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:

	Fabrication	Assembly	Setup	Inspection
Speedboat	4,750	dlh	13,500	dlh	34	setups	59	inspections
Bass boat	14,250		4,500		251		416
	19,000	dlh	18,000	dlh	285	setups	475	inspections

Each product is budgeted for 5,000 units of production for the year.

a. Determine the activity rates for each activity.

Fabrication	$fill in the blank 1 per direct labor hour
Assembly	$fill in the blank 2 per direct labor hour
Setup	$fill in the blank 3 per setup
Inspection	$fill in the blank 4 per inspection

b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.

Speedboat	$fill in the blank 5 per unit
Bass boat	$fill in the blank 6 per unit

Single Plantwide Factory Overhead Rate

Scrumptious Snacks Inc. manufactures three types of snack foods: tortilla chips, potato chips, and pretzels. The company has budgeted the following costs for the upcoming period:

Factory depreciation	$23,874
Indirect labor	59,166
Factory electricity	6,747
Indirect materials	14,013
Selling expenses	33,216
Administrative expenses	18,684
	Total costs	$155,700

Factory overhead is allocated to the three products on the basis of processing hours. The products had the following production budget and processing hours per case:

	Budgeted Volume (Cases)	Processing Hours Per Case
Tortilla chips		4,800			0.12
Potato chips		5,400			0.15
Pretzels		6,900			0.10
	Total		17,100

If required, round all per-case answers to the nearest cent.

a. Determine the single plantwide factory overhead rate. $fill in the blank 1 per processing hour

b. Use the overhead rate in (a) to determine the amount of total and per-case overhead allocated to each of the three products under generally accepted accounting principles.

	Total Factory Overhead	Per-Case Factory Overhead
Tortilla chips	$fill in the blank 2	$fill in the blank 3
Potato chips	fill in the blank 4	fill in the blank 5
Pretzels	fill in the blank 6	fill in the blank 7
Total	$fill in the blank 8