1. Determine the activity rate for each activity. Activity Rate Production /mh Setup /setup Inspection /insp. Shipping /cust. ord. Customer Service /req. 2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places. White Sugar Brown Sugar Powdered Sugar Total activity cost
1. Determine the activity rate for each activity. Activity Rate Production /mh Setup /setup Inspection /insp. Shipping /cust. ord. Customer Service /req. 2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places. White Sugar Brown Sugar Powdered Sugar Total activity cost
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Number of
Customer
Machine
Number of
Number of
Customer
Service
Hours
Setups
Inspections
Orders
Requests
Units
White sugar
2,000
50
100
410
25
8,000
Brown sugar
1,250
70
160
1,100
200
5,000
Powdered sugar
1,250
80
240
800
120
5,000
Total
4,500
200
500
2,310
345
18,000
Each product requires 0.25 machine hour per unit.
Required:
1. Determine the activity rate for each activity.
Activity Rate
Production
/mh
Setup
/setup
Inspection
/insp.
Shipping
/cust. ord.
Customer Service
/req.
2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places.
White Sugar
Brown Sugar
Powdered Sugar
Total activity cost
Activity cost per unit
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Activity-Based Costing
Pure Cane Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the
controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:
Activity
Activity Costs
Production
$247,500
Setup
48,000
Inspection
12,500
Shipping
69,300
Customer service
27,600
Total
$404,900
The activity bases identified for each activity are as follows:
Activity
Activity Base
Production
Machine hours
Setup
Number of setups
Inspection
Number of inspections
Shipping
Number of customer orders
Customer
Number of customer service
service
requests
The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:
Number of
Number of
Customer
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