Answered step by step
Verified Expert Solution
Question
1 Approved Answer
Following a review of its operational processes, Panarin Company has identified the following overhead activities costs and activity drivers for the upcoming year: Activity Setting
Following a review of its operational processes, Panarin Company has identified the following overhead activities costs and activity drivers for the upcoming year: Activity Setting up Inspecting Polishing Receiving Expected cost Activity Driver $140,000 Number of setups $100,000 Inspection hours $190,000 Machine hours ? Number of parts Estimated Activity Level 700 setups 10,000 hours 38,000 hours 100,000 parts The company produces several different couplings that it sells throughout North America. The following is information on two separate batches of the company's couplings: Direct Materials Direct Labour Units Completed Number of setups Inspection hours Machine hours Parts used Sleeve Couplings $1,900 $1,200 200 2 8 40 40 Disc Couplings $2,000 $1,200 100 2 4 60 80 The company's normal activity is 20,000 direct labour hours. Each batch uses 100 hours of direct labour. Upon investigation, you discover that Receiving employs a worker, who spends 75% of her time on the receiving activity and 25% of her time on inspectitog products. Her annual salary is $80,000. In addition, Receiving also uses a forklift, at a cost of $12,000 per year for fuel and maintenance. The forklift is used only in receiving. Required: a Compute the unit cost for Sleeve Couplings, using direct labour hours to assign overhead. b. Compute the unit cost for Sleeve Couplings, using activity rates
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access with AI-Powered Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started