Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity Costing

Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:

Product	Machine Hours	Setups	Receiving Orders	Packing Orders
Infantry	20,000	300	900	1,600
Special forces	20,000	100	100	800
Costs	$80,000	$24,000	$18,000	$30,000

Required:

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1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate. (Round overhead rate answer to two decimal places and other answers to the nearest dollar.)

The overhead rate is ____ per machine hour.

The total overhead assigned to the infantry product is ____.

The total overhead assigned to the Special Forces product is _____.

2. Calculate consumption ratios for each activity. (Round your answers to two decimal places.)

	Consumption Ratios
Overhead Activity	Infantry	Special forces
Machining
Setups
Receiving
Packing

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Feedback

Divide the total overhead by the total machine hours for rate per machine hour. Multiply rate by machine hours for infantry and special forces.

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3. Calculate a rate for each activity by using the associated driver.

Machining:		per machine hour
Setups:		per setup
Receiving:		per receiving order
Packing:		per packing order

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4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3.

	Infantry	Special forces
Machining
Setups
Receiving
Packing
Total