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Question Completion Status: Resource and Activity-Based Cost Drivers EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is
Question Completion Status: Resource and Activity-Based Cost Drivers 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 linesthe highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Factory Costs Salaries $640,000 Supplies 110,000 Factory expense 450,000 Total $1,200,000 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. EEl has three activities: job setup, assembly, and packaging. The amount of the cost pool for each of the three activities and the activity cost drivers for the two products are summarized below. Activities The cost & the driver Setup $225,000 (Batch) Assembly $884,000 (Units) Packaging $91,000 (Packing hours) Safe-V Safe-T Batches 400 280 Units 40,000 55,000 Packaging hours, per unit 0.5 0.2 Activate Windows Go to Settings to activate Materials per unit $ 3.80 $ 6.50 Required: Determine the activity-driver rates for assigning factory costs to the two products
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