7. Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Activity Budgeted Activity Cost Casting Assembly Inspecting Activity Base $650,000 Machine hours 85,000 Direct labor hours 28,000 Number of inspections Setup 15,750 Number of setups Materials 12,000 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Casting Assembly 7,500 12,500 20,000 2,000 3,000 5,000 Inspecting Setup 500 250 750 150 100 250 Materials 400 300 700 Units produced 5,000 2,500 7,500 a. Determine the activity rate for each activity. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product.

7. Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Activity Budgeted Activity Cost Casting Assembly Inspecting Activity Base $650,000 Machine hours 85,000 Direct labor hours 28,000 Number of inspections Setup 15,750 Number of setups Materials 12,000 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Casting Assembly 7,500 12,500 20,000 2,000 3,000 5,000 Inspecting Setup 500 250 750 150 100 250 Materials 400 300 700 Units produced 5,000 2,500 7,500 a. Determine the activity rate for each activity. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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