Exercise 17-5 Assigning costs using ABC LO P3 Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity Expected Costs Expected Activity Handling materials $630,000 100,000 parts Inspecting product 985,000 1,500 batches Processing purchase orders 110,000 700 orders Paying suppliers 180,000 500 invoices Insuring the factory 305,000 40,000 square feet Designing packaging 80,000 2 models Assume that the following information is available for the company's two products for the first quarter of this year Production volume Parts required Batches made Purchase orders Invoices Space occupied Models Deluxe Model 10,000 units 20,000 parts 250 batches 50 orders 50 invoices 10,000 sq. ft. 1 model Basic Model 30,000 units 30,000 parts 100 batches 20 orders 10 invoices 7,000 sq.ft 1 model Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model? (Round activity rate and average OH cost per unit answers to 2 decimal places.) Deluxe Activity Handling materials Activity Rate Cost driver quantity incurred OH Allocated 1 Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model? (Round activity rate and average OH cost per unit answers to 2 decimal places.) Deluxe Activity Rate Cost driver quantity incurred OH Allocated Book Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging Print Activity Rate Cost driver quantity incurred OH Allocated Basic Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging Ches 2 Exercise 17-15 Activity-based costing rates and allocations LO P3 as point A company has two products: standard and deluxe. The company expects to produce 37.375 standard units and 63,240 deluxe units. It uses activity-based costing and has prepared the following analysis showing budgeted cost and cost driver activity for each of its three activity cost pools Budgeted Activity of Cost Driver Activity Cost Pool Budgeted Cost Standard Deluxe Activity 1 $100,750 2,580 5,250 Activity 2 $102,000 4.500 5,500 Activity 3 $ 92,800 3,000 2,800 Doce Required: 1. Compute overhead rates for each of the three activities. 2. What is the expected overhead cost per unit for the standard units? 3. What is the expected overhead cost per unit for the deluxe units? (Round activity rate and cost per unit answers to 2 decimal places.) Activity Expected Costs Expected Activity Driver Activity Rate 15 2 3 Standard Activity 100,760 102.000 92,800 Activity Driver Activity Rato Allocated Cost 1 2 2 Required: 1. Compute overhead rates for each of the three activities. 2. What is the expected overhead cost per unit for the standard units? 3. What is the expected overhead cost per unit for the deluxe units? (Round activity rate and cost per unit answers to 2 decimal places.) 5 ints Activity Expected Costs D Expected Activity Driver Activity Rate eBook 1 $ 100.750 102.000 2 3 92,800 Print Standard Activity Activity Driver Activity Rate Allocated Cost 1 2. 3 Deluxe Activity Activity Driver Activity Rate Allocated Cost 1 2 3
