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Problem 5-39 Resource and Activity-Based Cost Drivers [LO 5-1,5-3] EyeGuard Equipment inc (EEI) manufactures protective eyewear for use in commercial and home applications. The product
Problem 5-39 Resource and Activity-Based Cost Drivers [LO 5-1,5-3] EyeGuard Equipment inc (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines the highest quality product is called Safe-T, and a low-cost value version is called Safe-V Information on the factory conversion costs for Eel is as follows: Salaries Supplies Factory expense Factory Costs $ 353,000 153,00 353,000 $ 1,559,000 EEl uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. Et has four activities: job setup, assembly, inspecting and finishing, and packaging Setup 2016 Salaries Supplies Factory expense Inspecting and Finishing 153 15 10 Assembly 50 50 90 Packaging Total 100% 100 100 The activity cost drivers for the two products are summarized below. Activities Setup Assembly Inspect and finishing Packaging Activity Driver match Units Finishing hours Packing hours Batches Uit in the hours, per unit Packaging hours, per unit Materials per unit 230 03.000 0.30 Safe 630 75,000 0.20 0.10 3 9.20 4.00 The activity cost drivers for the two products are summarized below. Activities Setup Assembly Inspect and finishing Packaging Activity Driver Batch Units Finishing hours Packing hours Batches Units Finishing hours, per unit Packaging hours, per unit Materials per unit Safe-V 280 63,000 9.30 0.20 $ Safe-T 630 75,000 0.2 0.10 $ 5 Required: 1. Determine the amount of the cost pool for each of the four activities 2. Determine the activity-driver rates for assigning factory costs to the two products 3. Determine the activity-based unit cost for each of the products. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Required 3 Determine the activity-based unit cost for each of the products. (Round your intermediate calculations and final answers to 2 decimal places) Safe.V Activity based cost per unit Safe-T
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