Activity | Activity Rate
Fabrication | $22 per machine hour (mh)
Assembly | $12 per direct labor hour (dlh)
Setup | $40 per setup
Inspecting | $18 per inspection
Production scheduling | $8 per production order
Purchasing | $5 per purchase order
The activity-base usage quantities and units produced for each product were as follows:
Stationary Bicycle | Treadmill
Machine hours 1,680 | 1,070
Direct labor hours 243 | 131
Setups 45 | 20
Inspections 158 | 94
Production orders 60 | 32
Purchase orders 240 | 98
Units produced 500 | 350
Use the activity rate and usage information to compute the total activity costs and the activity costs per unit for each product.
Answer:
Stationary Bicycle Treadmill
Activity-
Base Activity Activity
Usage × Rate = Cost
Activity-
Base Activity Activity
Usage × Rate = Cost
Fabrication 1,680 mh $22 /mh $36,960 1,070 mh $22 /mh $23,540
Assembly 243 dlh $12 /dlh 2,916 131 dlh $12 /dlh 1,572
Setup 45 setups $40 /setup 1,800 20 setups $40 /setup 800
Inspecting 158 insp. $18 /insp. 2,844 94 insp. $18 /insp. 1,692
Production
scheduling 60 prod. orders $8 /prod. order 480 32 prod. orders $8 /prod. order 256
Purchasing 240 purch. ord. $5 /purch. ord. 1,200 98 purch. ord. $5 /purch. ord. 490
Total $46,200 $28,350
÷ Number of units ÷ 500 ÷ 350
Activity cost per unit $92.40 $81.00
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