Question
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
| Activity | Cost | Cost Driver | ||
| Material handling | $ | 267,000 | Number of parts | |
| Material insertion | 3,410,000 | Number of parts | ||
| Automated machinery | 864,000 | Machine hours | ||
| Finishing | 193,000 | Direct labor hours | ||
| Packaging | 193,000 | Orders shipped | ||
| Total | $ | 4,927,000 | ||
The following information pertains to the three product lines for next year:
| Economy | Standard | Deluxe | |||||||||
| Units to be produced | 18,900 | 5,500 | 2,400 | ||||||||
| Orders to be shipped | 1,800 | 640 | 270 | ||||||||
| Number of parts per unit | 15 | 20 | 25 | ||||||||
| Machine hours per unit | 1 | 3 | 5 | ||||||||
| Labor hours per unit | 3 | 3 | 3 | ||||||||
What is Barnetts pool rate for the automated machinery activity?
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The Payroll Audit
Authors: Robert Leach
1st Edition
0955970792, 978-0955970795
