Adirondack Corporation is estimating activity costs associated with producing two different sized e reader tablets The indirect labor can be traced to three separate activity pools The budgeted activity cost and activity base information, along with the estimated activity base information, is provided below ActivityCost Activity Base Purchasing $250,000 Number of purchase orders Materials handling $500,000 Number of moves Production 1,350,000 Machine hours TOTAL $2,100,000 Number of Purchase Orders Number of Moves Machine Hours Number of Units 7 tablet 3,000 1,500 2,500 2,500 10 tablet 5,000 600 7,500 3,500 TOTALS 8,000 2,100 10,000 6,000 Required Determine the Activity rate for each activity cost pool All work must be shown for credit Please label your answer as the activity rate for Purchasing Materials handling Production Activity Activity Cost Activity Base Activity Base Total Activity Cost Total Activity Base Purchasing $250000 Number of Purchase Orders 8000 250000 8000 31 25 Material Handling $500,000 Number of Moves 2100 500000 2100 238 09 Production $1350000 Machine Hours 10000 $1350000 10000 135 Using the information from the activity rate you calculated, use the following chart (as a guide you do not need to replicate the template) to determine the activity cost per tablet All work must be shown for credit A B C D E F G 1 7 inch tablet 10 inch tablet 2 Activity Activity Base Usage Activity Rate Activity Cost Activity Base Usage Activity Rate Activity Cost 3 Purchasing 4 5 6 7 8 Activity cost per tablet Using the information from the activity based costing problem If traditional costing had been used and number of machine hours were the allocation base, what would the single allocation rate be Would applying a single allocation rate be a wise decision to apply costs in this scenario Why or why not

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Adirondack Corporation is estimating activity costs associated with producing two different sized e-reader tablets. The indirect labor can be traced to three separate activity pools.

Adirondack Corporation is estimating activity costs associated with producing two different sized e-reader tablets. The indirect labor can be traced to three separate activity pools. The budgeted activity cost and activity base information, along with the estimated activity-base information, is provided below. ActivityCost Activity Base

Purchasing $250,000 Number of purchase orders

Materials handling $500,000 Number of moves

Production 1,350,000 Machine hours

TOTAL $2,100,000

Number of Purchase Orders; Number of Moves; Machine Hours; Number of Units

7 tablet 3,000 1,500 2,500 2,500

10" tablet 5,000 600 7,500 3,500

TOTALS 8,000 2,100 10,000 6,000

Required: Determine the Activity rate for each activity cost pool. All work must be shown for credit.

Please label your answer as the activity rate for: Purchasing; Materials handling; & Production.

Activity	Activity Cost	Activity Base	Activity Base Total	Activity Cost / Total Activity Base
Purchasing	$250000	Number of Purchase Orders	8000	250000/8000=31.25
Material Handling	$500,000	Number of Moves	2100	500000/2100=238.09
Production	$1350000	Machine Hours	10000	$1350000/10000=135

Using the information from the activity rate you calculated, use the following chart (as a guide- you do not need to replicate the template) to determine the activity cost per tablet:

All work must be shown for credit.

	A	B	C	D	E	F	G
1		7 inch tablet			10 inch tablet
2	Activity	Activity-Base Usage	Activity Rate	Activity = Cost	Activity- Base Usage	Activity Rate	Activity = Cost
3	Purchasing
4
5						]
6
7
8	Activity cost per tablet

Using the information from the activity based costing problem:

If traditional costing had been used and number of machine hours were the allocation base, what would the single allocation rate be? Would applying a single allocation rate be a wise decision to apply costs in this scenario? Why or why not?