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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 $640,000 Expected Activity 100,000 parts Inspecting product 915,000 Processing purchase orders 120,000 Paying suppliers 190,000 Insuring the factory 315,000 1,500 batches 700 orders 500 invoices 40,000 square feet Designing packaging 90,000 2 models Assume that the following information is available for the company's two products for the first quarter of this year. Production volume Parts required Batches made Deluxe Model 10,000 units 20,000 parts 250 batches Basic Model 30,000 units 30,000 parts 100 batches IS IT Purchase orders Invoices Space occupied Models 50 orders 50 invoices 10,000 sq. ft. 1 model 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.) Deluxe Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Activity Rate Cost driver quantity incurred OH Allocated
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