Activity-Based Costing Steampunk Corporation has the following predicted indirect costs and cost drivers for 2019 for the given activity cost pools: Maintenance Materials handling Machine Inspections Total Fabrication Finishing Department Department Cost Driver $ 84,000 42,000 Machine hours 126,000 63,000 Material moves 294,000 21,000 Machine setups 105,000 Inspection hours $ 504,000 $ 231,000 The following activity predictions were also made for the year: Machine hours Material moves Machine setups Inspection hours Fabrication Finishing Department Department 5,000 2,500 1,500 750 350 25 500 It is assumed that the cost per unit of activity for a given activity does not vary between departments. Steampunk's president, Abner Punk, is trying to evaluate the company's product mix strategy regarding two of its product models, SW100 and SG150. The company has been using a company wide overhead rate based on machine hours but is considering switching to either department rates of activity-based rates. The production manager has provided the following data for the production of a batch of 100 units for each of these models: Direct materials cost SW100 SG 150 $ 28,000 $ 42,000 $ 11,200 $ 8,400 250 350 100 50 Direct labor cost Machine hours (Fabrication) Machine hours (Finishing) Materials moves Machine setups Inspection hours 20 40 5 10 15 30 a. Determine the cost of one unit each of SW100 and SG150, assuming a company-wide overhead rate is used based o total machine hours. Round rate to two decimal places. Overhead rate based on total machine hours: $ per machine hour Use rounded overhead rate calculated about for calculations below. Round cost answers to the nearest whole number. Round cost per unit to two decimal places. SW100 SG 150 $ $ Product Costs per Unit Direct materials Direct labor Manufacturing overhead Total cost per batch Number of units per batch Cost per unit $ $ $ b. Determine the cost of one unit of SW100 and SG150, assuming department overhead rates are used. Overhead is assigned based on machine hours in both departments. Round to two decimal places, if applicable. Overhead rate based on machine hours for Fabrication Dept.: $ per machine hour. Overhead rate based on machine hours for Finishing Dept.: $ per machine hour. Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. SW100 SG 150 $ $ Product Costs per Unit Direct materials Direct labor Manufacturing overhead: Fabrication Dept. Finishing Dept. Total cost per batch Number of units per batch Cost per unit $ $ $ $ c. Determine the cost of one unit of SW100 and SG150, assuming activity-based overhead rates are used for maintenance, materials handling, machine setup, and inspection activities. Round rate to two decimal places, if applicable. Activity-based overhead rates: Maintenance $ Materials handling $ Machine setup $ Inspection activities $ Use rounded overhead rate calculated above for calculations below. Round cost answers to the nearest whole number, when needed. Round cost per unit to two decimal places, if needed. SW100 SG 150 $ Product Costs per Unit Direct materials Direct labor Manufacturing overhead: Maintenance activity Materials handling activity Machine setups activity Inspections activity Total cost per batch Number of units per batch Cost per unit $ $ $ $
