Chapter 18 Activity-Based Costing 915 Problem $1,400,000 175,000 direct labor hours 1. Single Plantwide Factory Overhead Rate- - $8 per direct labor hour Factory overhead cost per unit: LCD TV Tablet Smartphone 140,000 1,120,000 25,000 Total factory overhead Number of units . .. . Factory overhead cost per unit.................. 10,000 200,000 80,000 $ 20.00 40.00 + 10,0002,000 50,000 S 22.40 2. Under activity-based costing, an activity rate must be determined for each activity pool: Budgeted Activity Cost Total Activity- Base Usage Activity Activity Rate 125 setups$3,430 per setup 125 production$1,960 per production orders order 75 inspections $2,450 per inspection 750 requisitions490 per requisition $367,500 $175,000 1 Materials management. 175,000 direct 1 per direct labor hour labor hours These activity rates can be used to determine the activity-based factory overhead cost unit as follows: per LCD TV Chapter 18 Activity-Based Costing 915 Problem $1,400,000 175,000 direct labor hours 1. Single Plantwide Factory Overhead Rate- - $8 per direct labor hour Factory overhead cost per unit: LCD TV Tablet Smartphone 140,000 1,120,000 25,000 Total factory overhead Number of units . .. . Factory overhead cost per unit.................. 10,000 200,000 80,000 $ 20.00 40.00 + 10,0002,000 50,000 S 22.40 2. Under activity-based costing, an activity rate must be determined for each activity pool: Budgeted Activity Cost Total Activity- Base Usage Activity Activity Rate 125 setups$3,430 per setup 125 production$1,960 per production orders order 75 inspections $2,450 per inspection 750 requisitions490 per requisition $367,500 $175,000 1 Materials management. 175,000 direct 1 per direct labor hour labor hours These activity rates can be used to determine the activity-based factory overhead cost unit as follows: per LCD TV