Question
Required information Use the following information for the Problems below. (Algo) Skip to question [The following information applies to the questions displayed below.] Tent Master
Required information
Use the following information for the Problems below. (Algo)
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[The following information applies to the questions displayed below.] Tent Master produces Pup tents and Pop-up tents. The company budgets $318,000 of overhead costs and 53,000 direct labor hours for this year. Additional information follows.
Per Unit | Selling Price | Direct Materials | Direct Labor |
---|---|---|---|
Pup tent | $ 88 | $ 24 | $ 49 |
Pop-up tent | 83 | 27 | 31 |
Problem C-3A (Algo) Pricing analysis with activity-based costing LO P2
Activity | Budgeted Cost | Activity Cost Driver | Budgeted Activity Usage |
---|---|---|---|
Assembly | $ 212,000 | Direct labor hours | 53,000 |
Electricity | 35,000 | Machine hours | 10,000 |
Materials purchasing | 71,000 | Purchase orders | 500 |
Total | $ 318,000 |
Required: 1. Compute an activity rate for each activity using activity-based costing. 2. The company used the activities below to produce 10,000 Pup tents and 6,000 Pop-up tents. Allocate overhead costs to Pup tents and to Pop-up tents and compute overhead cost per unit for each.
Activity Cost Driver | Activity Usage | |
---|---|---|
Pup tents | Pop-up tents | |
Direct labor hours | 35,500 | 17,500 |
Machine hours | 4,000 | 6,000 |
Purchase orders | 150 | 350 |
3. Compute product cost per unit for Pup tents and for Pop-up tents. 4. For each product, compute the selling price per unit minus the product cost per unit.
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