1. Calculate the four activity rates. Machining rate Engineering rate Receiving rate Inspecting rate 1000 Regular 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost per machine hour per hour per order per hour per unit

FINANCIAL ACCOUNTING
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ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Activity-Based Product Costing
Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these
activities and their drivers is given below.
Units produced
Prime costs
Machine hours
Engineering hours
Receiving orders
Inspection hours
Overhead costs:
Machining
Engineering
Receiving
Inspecting products
Required:
Regular
Check My Work
140,000
$10,920,000
140,000
400
1. Calculate the four activity rates.
Machining rate
500
800
$12,600,000
1,040,000
600,000
384,000
Deluxe
420,000
$42,840,000
700,000
3,600
1,500
1,600
per machine hour
Total
$53,760,000
840,000
4,000
2,000
2,400
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Transcribed Image Text:Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Units produced Prime costs Machine hours Engineering hours Receiving orders Inspection hours Overhead costs: Machining Engineering Receiving Inspecting products Required: Regular Check My Work 140,000 $10,920,000 140,000 400 1. Calculate the four activity rates. Machining rate 500 800 $12,600,000 1,040,000 600,000 384,000 Deluxe 420,000 $42,840,000 700,000 3,600 1,500 1,600 per machine hour Total $53,760,000 840,000 4,000 2,000 2,400 Previous Next >
eBook
1. Calculate the four activity rates.
Machining rate
Engineering rate
Receiving rate
Inspecting rate
2. Calculate the unit costs using activity rates. Round your answers to the nearest cent.
Regular
Deluxe
Regular
Deluxe
Unit cost
Calculate the overhead cost per unit. Round your answers to the nearest cent.
Overhead Cost
Regular
Deluxe
per machine hour
per hour
per order
per hour
Check My Work
per unit
per unit
per unit
per unit
3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost
Cost assignment
Transcribed Image Text:eBook 1. Calculate the four activity rates. Machining rate Engineering rate Receiving rate Inspecting rate 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Regular Deluxe Regular Deluxe Unit cost Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Regular Deluxe per machine hour per hour per order per hour Check My Work per unit per unit per unit per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost Cost assignment
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