Black and Blue Sports Inc manufactures two products snowboards and skis The factory overhead incurred is as follows 1 Indirect labor $507,000 00 2 Cutting Department 156,000 00 3 Finishing Department 192,000 00 4 Total $855,000 00 The activity base associated with the two production departments is direct labor hours The indirect labor can be assigned to two different activities as follows 1 Activity Budgeted Activity Cost Activity Base 2 Production control $237,000 00 Number of production runs 3 Materials handling 270,000 00 Number of moves 4 Total $507,000 00 The activity base usage quantities and units produced for the two products follow Number of Number of Direct Labor Hours Direct Labor Hours Units Production Runs Moves Cutting Finishing Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis 70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Required 1 Determine the factory overhead rates under the multiple production department rate method Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively 2 Determine the total and per unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1) Complete the Activity Tables for snowboards and skis 3 Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments 4 Determine the total and per unit cost assigned to each product under activity based costing 5 Explain the difference in the per unit overhead allocated to each product under the multiple production department factory overhead rate and activity based costing methods If required, round your answers to two decimal places Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries X Factory Overhead Rates Shaded cells have feedback Activity based and department rate product costing and product cost distortions Instructions Amount Descriptions Factory Overhead Rates Factory Overhead Costs Activity Table Snowboards Activity Table Skis Final Question X Instructions Black and Blue Sports Inc manufactures two products snowboards and skis The factory overhead incurred is as follows 1 Indirect labor $507,000 00 2 Cutting Department 156,000 00 3 Finishing Department 192,000 00 4 Total $855,000 00 The activity base associated with the two production departments is direct labor hours The indirect labor can be assigned to two different activities as follows 1 Activity Budgeted Activity Cost Activity Base 2 Production control $237,000 00 Number of production runs 3 Materials handling 270,000 00 Number of moves 4 Total $507,000 00 The activity base usage quantities and units produced for the two products follow Number of Number of Direct Labor Hours Direct Labor Hours Units Production Runs Moves Cutting Finishing Produced Snowboards 430 5,000 4,000 2,000 6,000 Skis 70 2,500 2,000 4,000 6,000 Total 500 7,500 6,000 6,000 12,000 Required 1 Determine the factory overhead rates under the multiple production department rate method Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively 2 Determine the total and per unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1) Complete the Activity Tables for snowboards and skis 3 Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments 4 Determine the total and per unit cost assigned to each product under activity based costing 5 Explain the difference in the per unit overhead allocated to each product under the multiple production department factory overhead rate and activity based costing methods If required, round your answers to two decimal places Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries X Factory Overhead Rates Shaded cells have feedback 1 Determine the factory overhead rates under the multiple production department rate method Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively If required, round your answers to two decimal places Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries Score 20 20 1 Department Production Department Rate 2 per direct labor hour 3 per direct labor hour Points 4 4 Feedback Check My Work Calculate for each department Total department overhead total department allocation base Department rate X Activity Table Snowboards Shaded cells have feedback Complete the Activity Tables for snowboards and skis 3 Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments 4 Determine the total and per unit cost assigned to each product under activity based costing If required, round your answers to two decimal places Snowboards Activity Activity Activity Activity Usage X Rate Cost Production control prod runs prod run Materials handling moves move Cutting Department dlh dlh Finishing Department dlh dlh Total Number of units Activity cost per unit Points 15 23 Feedback Check My Work Calculate for each activity Overhead Activity base Activity Rate Calculate for each product Activity usage x Activity rate from Req (3) Activity cost Sum all activity costs per product to determine a total and divide the total overhead by budgeted units to derive the activity costs per unit for each product

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Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows: 1 Indirect labor $507,000.00 2 Cutting Department

Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows:

1	Indirect labor	$507,000.00
2	Cutting Department	156,000.00
3	Finishing Department	192,000.00
4	Total	$855,000.00

The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:

1	Activity	Budgeted Activity Cost	Activity Base
2	Production control	$237,000.00	Number of production runs
3	Materials handling	270,000.00	Number of moves
4	Total	$507,000.00

The activity-base usage quantities and units produced for the two products follow:


	Number of	Number of	Direct Labor Hours	Direct Labor Hours	Units
	Production Runs	Moves	Cutting	Finishing	Produced
Snowboards	430	5,000	4,000	2,000	6,000
Skis	70	2,500	2,000	4,000	6,000
Total	500	7,500	6,000	6,000	12,000

Required:

2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1).* **

	Complete the Activity Tables for snowboards and skis.
	3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*
	4. Determine the total and per-unit cost assigned to each product under activity-based costing.*
	5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.

* If required, round your answers to two decimal places.

** Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Factory Overhead Rates

Shaded cells have feedback.

Activity-based and department rate product costing and product cost distortions

Instructions

Amount Descriptions

Factory Overhead Rates

Factory Overhead Costs

Activity Table - Snowboards

Activity Table - Skis

Final Question

Instructions

Black and Blue Sports Inc. manufactures two products: snowboards and skis. The factory overhead incurred is as follows:

1	Indirect labor	$507,000.00
2	Cutting Department	156,000.00
3	Finishing Department	192,000.00
4	Total	$855,000.00

The activity base associated with the two production departments is direct labor hours. The indirect labor can be assigned to two different activities as follows:

1	Activity	Budgeted Activity Cost	Activity Base
2	Production control	$237,000.00	Number of production runs
3	Materials handling	270,000.00	Number of moves
4	Total	$507,000.00

The activity-base usage quantities and units produced for the two products follow:


	Number of	Number of	Direct Labor Hours	Direct Labor Hours	Units
	Production Runs	Moves	Cutting	Finishing	Produced
Snowboards	430	5,000	4,000	2,000	6,000
Skis	70	2,500	2,000	4,000	6,000
Total	500	7,500	6,000	6,000	12,000

Required:

2. Determine the total and per-unit factory overhead costs allocated to each product, using the multiple production department overhead rates in (1).* **

	Complete the Activity Tables for snowboards and skis.
	3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*
	4. Determine the total and per-unit cost assigned to each product under activity-based costing.*
	5. Explain the difference in the per-unit overhead allocated to each product under the multiple production department factory overhead rate and activity-based costing methods.

* If required, round your answers to two decimal places.

** Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Factory Overhead Rates

Shaded cells have feedback.

1. Determine the factory overhead rates under the multiple production department rate method. Assume that indirect labor is associated with the production departments, so that the total factory overhead is $315,000 and $540,000 for the Cutting and Finishing departments, respectively. If required, round your answers to two decimal places. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.

Score: 20/20

1	Department	Production Department Rate
2			per direct labor hour
3			per direct labor hour

Points:

4 / 4

Feedback

Check My Work

Calculate for each department:

Total department overhead total department allocation base = Department rate

Activity Table - Snowboards

Shaded cells have feedback.

Complete the Activity Tables for snowboards and skis.

	3. Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments.*
	4. Determine the total and per-unit cost assigned to each product under activity-based costing.*
	* If required, round your answers to two decimal places.

	Snowboards
Activity	Activity-		Activity		Activity
Activity	Usage	X	Rate	=	Cost
Production control	prod. runs		/prod. run
Materials handling	moves		/move
Cutting Department	dlh		/dlh
Finishing Department	dlh		/dlh
Total
Number of units
Activity cost per unit

Points:

15 / 23

Feedback

Check My Work

Calculate for each activity:

Overhead Activity base = Activity Rate

Calculate for each product:

Activity usage x Activity rate from Req. (3) = Activity cost; Sum all activity costs per product to determine a total and divide the total overhead by budgeted units to derive the activity costs per unit for each product.