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Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity
Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go- karts: Deluxe and Basic. Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Expected Costs $625,000 900,000 105,000 Expected Activity 100,000 parts 1,500 batches 700 orders 500 invoices 175,000 300,000 75,000 40,000 square feet 2 models Assume that the following information is available for the company's two products for the first quarter of this year. Basic Model 30,000 units 30,000 parts Deluxe Model Production volume Parts required Batches made 10,000 units 20,000 parts 250 batches 100 batches 20 orders 10 invoices Purchase orders 50 orders Invoices 50 invoices 10,000 sq. ft. 1 model 7,000 sq ft 1 model Space occupied Models Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model? (Round activity rate and average OH cost per unit answers to 2 decimal places.) Deluxe Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging OH Allocated Activity Rate Cost driver quantity incurred Basic Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging OH Allocated Activity Rate Cost driver quantity incurred
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