Activity Rates and Product Costs using Activity-Based Costing Lonsdale 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: Budgeted Activity Activity Cost Activity Base Casting $328,780 Machine hours Assembly 209,380 Direct labor hours Inspecting 32,320 Number of inspections Setup 46,400 Number of setups Materials handling 44,640 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 Machine hours 5,130 4,540 9,670 Direct labor hours 4,410 6,610 11,020 Number of inspections 1,540 480 2,020 Number of setups 260 60 320 Number of loads 730 200 930 Units produced 10,200 5,100 15,300 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting $4 34 v per machine hour Assembly $ 19 v per direct labor hour Inspecting $4 16 V per inspection Setup 145 V per setup Materials handling 48 V per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.
Activity Rates and Product Costs using Activity-Based Costing Lonsdale 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: Budgeted Activity Activity Cost Activity Base Casting $328,780 Machine hours Assembly 209,380 Direct labor hours Inspecting 32,320 Number of inspections Setup 46,400 Number of setups Materials handling 44,640 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 Machine hours 5,130 4,540 9,670 Direct labor hours 4,410 6,610 11,020 Number of inspections 1,540 480 2,020 Number of setups 260 60 320 Number of loads 730 200 930 Units produced 10,200 5,100 15,300 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting $4 34 v per machine hour Assembly $ 19 v per direct labor hour Inspecting $4 16 V per inspection Setup 145 V per setup Materials handling 48 V per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
(8) ABC: Need help on Part B
Transcribed Image Text:b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.
Product
Total Activity Cost
Activity Cost Per Unit
Entry Lighting Fixtures
$ 355,590
$ 305,930 x
Dining Room Lighting Fixtures
$
34.86
X
2$
59.99
Transcribed Image Text:Activity Rates and Product Costs using Activity-Based Costing
Lonsdale 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:
Budgeted
Activity
Activity Cost Activity Base
Casting
$328,780
Machine hours
Assembly
209,380
Direct labor hours
Inspecting
32,320
Number of inspections
Setup
46,400
Number of setups
Materials handling
44,640
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
Machine hours
5,130
4,540
9,670
Direct labor hours
4,410
6,610
11,020
Number of inspections
1,540
480
2,020
Number of setups
260
60
320
Number of loads
730
200
930
Units produced
10,200
5,100
15,300
a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Activity
Activity Rate
Casting
34
per machine hour
Assembly
$
19
per direct labor hour
Inspecting
16
per inspection
Setup
145
per setup
Materials handling
$
48
per load
b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.
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