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Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to
Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows Activity Production Setup inspection Shlpplng Customer service Budgeted Activity Cost $453,600 114,000 106,500 140,500 78,400 $393,200 Total The activity bases identified for each activity are as follows: Activity Production Setup Inspection Shipping Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Activity Base Machine hours Number of setups Number of inspections Number of customer orders Customei Number of Number of Number of Service Units Setups Inspections Customer Orders Machine Hours 3,170 2,020 2,010 7,200 Requests whe sugar Brown sugar Powdered sugar 20 110 110 300 260 390 650 1,300 740 2,040 920 3,700 70 7,925 440 5,050 190 5,025 700 18,000 Total Each product requlres 0.9 machlne hour per unit
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