Ch 25 ABC practice questions 1. Turtle Company has total estimated factory overhead for the year of $1,200,000, divided into four activities: fabrication, $600,000; assembly, S240,000; setup, $200,000; and materials handling, $160,000. Turtle manufactures two products, Boogie Boards and Surf Boards. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Materials Handling Setup Boogie Boards Surf Boards 10,000 dlh 30,000 dlh 60 setups 100 moves 700 30,000 10,000 40.000 dlh 40.000 dlh 500 setups 440 800 moves Each product is budgeted for 10,000 units of production for the year. Determine (a) the activity (b) the factory overhead cost per unit for each product using activity-based costing. rates for each activity and 2. Canine Company has total estimated factory overhead for the year of $2,400,000, divided into four activities: fabrication, $1,200,000; assembly, S480,000; setup, $400,000; and materials handling, S320,000. Canine manufactures two products, Standard Crates and Deluxe Crates. The activity-base usage quantities for each product by each activity are as follows Materials Handling 200 moves Fabrication Assembly Setup 20,000 dlh 60.000 80.000 dlh Standard Deluxe 60,000 dlh 20.000 80.000 dlh 1000 setups1600 moves 120 setups 880 1.400 Each product is budgeted for 20,000 units of production for the year Determine (a) the activity rates for each activity and (b) the factory overhead cost per unit for each product using activity- based costing 3. Sensational Soft Drinks makes three products: iced tea, soda, and lemonade. The following data are available: Iced Tea $0.90 0.30 S0.60 Lemonade $0.50 O.10 S040 Soda $0.60 0.15 S0.45 Sales price per unit Variable cost per unit Contribution margin per unit Sensational is experiencing a bottleneck in one of its processes that affects each product as follows: Iced Tea Soda Lemonade Bottleneck process hours per unit 3 3 in terms of profitability (a) Using a theory of constraints (TOC) approach, rank the products (b) What price for lemonade would equate its profitability (contribution margin per bottleneck hour) to that of soda