Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Adventures manufactures two products: Accessory A and Accessory B. To produce these accessories, the company has the following activities and their respective total costs for

Adventures manufactures two products: Accessory A and Accessory B. To produce these accessories, the company has the following activities and their respective total costs for the period: Overhead Item Expected Costs Cost Driver Setting up machines $68,000 Number of setups Material Handling $67,320 Number of moves Quality Inspections $18,600 Number of inspections Total Overhead Costs $153,920 Information on the number of activities for each product is as follows: Accessory A Accessory B Direct materials $78,455 $109,465 Direct labor $20,500 $19,600 Units completed 8,000 6,300 Direct labor- hours 1,025 980 Number of setups 1250 750 Number of moves 155 205 Number of inspections 45 30 Questions: A. (3 points) Calculate the activity rate (cost per activity) for each of the three activities. B. (6 points) Using the activity rates, compute the total activity cost allocated to both Accessory A and Accessory B. C. (2 points) Based on the allocated costs, what is the total production cost for Accessory A and Accessory B? D. (2 points) If the company wants to earn a 20% profit margin on each product, what should be the selling price per unit for Accessory A and Accessory B?

Step by Step Solution

3.33 Rating (165 Votes )

There are 3 Steps involved in it

Step: 1

Answers A Activity Rates Setting up machines Activity rate ... blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting

Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer

12th Edition

978-0073526706, 9780073526706

More Books

Students also viewed these Accounting questions