Activity-Based Costing: Factory Overhead Costs

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,112,000, divided into four activities: fabrication, $576,000; assembly, $224,000; setup, $168,000; and inspection, $144,000. 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	8,000	dlh	24,000	dlh	58	setups	100	inspections
Bass boat	24,000		8,000		422		700
	32,000	dlh	32,000	dlh	480	setups	800	inspections

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

a. Determine the activity rates for each activity.

Fabrication	$ ___per direct labor hour
Assembly	$___ per direct labor hour
Setup	$___ per setup
Inspection	$ ___per inspection

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

Speedboat	$ ___per unit
Bass boat	$___ per unit