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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.
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 Expected Costs Handling materials $655,000 Inspecting product 930,000 Processing purchase orders Paying suppliers Insuring the factory Designing packaging 135,000 205,000 330,000 105,000 500 invoices 40,000 square feet 2 models Expected Activity 100,000 parts 1,500 batches 700 orders Assume that the following information is available for the company's two products for the first quarter of this year. Production volume Deluxe Model 10,000 units Basic Model 30,000 units 30,000 parts Parts required Batches made Purchase orders Invoices 20,000 parts 250 batches 50 orders 50 invoices Space occupied Models 10,000 sq. ft. 1 model) 100 batches 20 orders 10 invoices 7,000 sq. ft 1 model 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.)
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