Question
Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on
Activity-Based Product Costing Roberts Company produces two weed eaters: basic and advanced. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Basic Advanced Total Units produced 140,000 420,000 Prime costs $10,920,000 $48,720,000 $59,640,000 Machine hours 140,000 700,000 840,000 Engineering hours 400 3,600 4,000 Receiving orders 400 1,200 1,600 Inspection hours 700 1,400 2,100 Overhead costs: Machining $8,400,000 Engineering 1,640,000 Receiving 624,000 Inspecting products 420,000 Required: 1. Calculate the four activity rates. 6X per machine hour Machining rate Engineering rate 410 per hour Receiving rate 156 X per order Inspecting rate 60 X per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Basic Advanced Unit cost per unit per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Basic Advanced per unit per unit Basic Advanced Overhead Cost per unit per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Basic Advanced Cost assignment
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