Activity-Based Costing

Mainline Marine Company has total estimated factory overhead for the year of $2,090,000, divided into four activities: fabrication, $750,000; assembly, $240,000; setup, $600,000; and inspection, $500,000. Mainline manufactures two types of boats: a speedboat and a bass boat. The activity-base usage quantities for each product by each activity are as follows:

Fabrication Assembly Setup Inspection

Speedboat 1,200dlh 1,800dlh 60setups 600 inspections Bass boat 1,800 1,200 100 200

3,000dlh 3,000dlh 160setups 800inspections

Each product is budgeted for 200 units of production for the year.

a.Determine the activity rates for each activity.

Fabrication $ per dlh

Assembly $ per dlh

Setup $ per setup

Inspection $ per inspection

b.Determine the factory overhead cost per unit for each product, using activity-based costing.

Speedboat $

Bass boat $