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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 Expected Costs: Handling materials $690,000 Inspecting product 965,000 Processing purchase orders 170,000 Paying suppliers 240,000 Insuring the factory Designing packaging 365,000 140,000 Expected Activity 100,000 parts 1,500 batches 700 orders 500 invoices 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. Production volume Parts required Batches made Purchase orders Invoices Space occupied Models Deluxe Model 10,000 units Basic Model 30,000 units 20,000 parts 250 batches 50 orders 50 invoices 10,000 sq. ft. 1 model 30,000 parts 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.) Deluxe Activity Handling materials Activity Rate per part Cost driver quantity incurred OH Allocated Inspecting product per batch 20,000 parts 250 batches Processing orders Paying suppliers per order EX: per invoice This is a numeric cell, so please Insuring factory per sq. ft. 10 enter numbers only. Designing packaging per model 1 model Basic Activity Handling materials Inspecting product Processing orders Paying suppliers Insuring factory Designing packaging Activity Rate Cost driver quantity incurred OH Allocated
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