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Fuller Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials
Fuller Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: Activity Materials handling Machine setup Insertion of parts Finishing Total Total Budgeted Manufacturing Overhead Cost Allocation Base $12,000 Number of parts 3,400 Number of setups 48,000 Number of parts 80,000 Finishing direct labor hours $143,400 Fuller Company expects to produce 1,000 chrome wheels during the year. The wheels are expected to use: Parts Setups Finishing Hours Consumed 3,000 2,000 Setups Parts Used Required 200 425 Finishing Hours Consumed 130 350 Job 420 Job 510 1. Compute the cost allocation rate for each activity. (Always use cell references and formulas where appropriate to receive full credit. If you copy/paste from the Instruction tab you will be marked wrong.) Fuller Company Computation of Cost Allocation Rates Activity Materials handling Machine setup Insertion of parts Finishing Activity Cost Allocation Rate per part per setup per part per hour
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