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Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production

Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows:

1

Assembly Department

$252,230.00

2

Test and Pack Department

203,370.00

3

Total

$455,600.00

The direct labor information for the production of 7,550 units of each product is as follows:

Department
Assembly Test and Pack
Blender 605 dlh 2,380 dlh
Toaster oven 2,615 750
Total 3,220 dlh 3,130 dlh

Four Finger Appliance used direct labor hours to allocate production department factory overhead to products.

The management of Four Finger Appliance Company has asked you to use activity-based costing instead of direct labor hours to allocate factory overhead costs to the two products. You have determined that $71,910 of factory overhead from each of the production departments can be associated with setup activity ($143,820 in total). Company records indicate that blenders required 133 setups, while the toaster ovens required only 47 setups. Each product has a production volume of 7,550 units.

Required:
Complete the Activity Tables for blenders and toaster ovens.
a. Determine the three activity rates (assembly, test and pack, and setup).*
b. Determine the total factory overhead and factory overhead per unit allocated to each product using the activity rates in (a).*
*If required, round all per-unit answers to the nearest cent.
Complete the Activity Table for blenders.
a. Determine the three activity rates (assembly, test and pack, and setup). Enter these rates in the Activity Rate column.*
b. Determine the total factory overhead and factory overhead per unit allocated to blenders product using the activity rates in (a).*
*If required, round all per-unit answers to the nearest cent.
Blender
Activity Activity-
Base Activity Activity
Usage X Rate = Cost
Assembly activity
Test and pack activity
Setup activity
Total
Units
Factory overhead cost per unit
Complete the Activity Table for toaster ovens.
a. Determine the three activity rates (assembly, test and pack, and setup). Enter these rates in the Activity Rate column.*
b. Determine the total factory overhead and factory overhead per unit allocated to toaster ovens product using the activity rates in (a).*
*If required, round all per-unit answers to the nearest cent.
Toaster Oven
Activity Activity-
Base Activity Activity
Usage X Rate = Cost
Assembly activity
Test and pack activity
Setup activity
Total
Units
Factory overhead cost per unit

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