Atlanta Systems produces two different products, Product A, which sells for $650 per unit, and Product B, which sells for $1,200 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Product B Usage by Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 230,000 $2,600,000 $ 240,000 116 134 2,320 34 2,680 46 Atlanta manufactures 12,500 units of Product A and 10,172 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor. Required: a. Calculate the activity rate for design. Rate for Design per hour b. Calculate the activity rate for machining. Rate for Machining per hour c. Calculate the activity rate for inspection. Rate for Inspection per batch
Atlanta Systems produces two different products, Product A, which sells for $650 per unit, and Product B, which sells for $1,200 per unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours as an activity driver, and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the activity drivers are as follows: Usage by Product A Product B Usage by Cost Design (Engineering Hours) Machining (Machine Hours) Inspection (Batches) $ 230,000 $2,600,000 $ 240,000 116 134 2,320 34 2,680 46 Atlanta manufactures 12,500 units of Product A and 10,172 units of Product B per month. Each unit of Product A uses $100 of direct materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor. Required: a. Calculate the activity rate for design. Rate for Design per hour b. Calculate the activity rate for machining. Rate for Machining per hour c. Calculate the activity rate for inspection. Rate for Inspection per batch
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![e. Determine the indirect costs assigned to Product B.
Indirect Costs
f. Determine the manufacturing cost per unit for Product A. (Round your answer to the nearest whole dollars.)
Manufacturing Cost
per unit
g. Determine the manufacturing cost per unit for Product B. (Round your answer to the nearest whole dollars.)
Manufacturing Cost
per unit
h. Determine the gross profit per unit for Product A. (Round your intermediate calculations and final answer to the nearest whole
dollars.)
Gross Profit
per unit
i. Determine the gross profit per unit for Product B. (Round your intermediate calculations and final answer to the nearest whole
dollars.)
Gross Profit
per unit](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f1709b6-d6cf-4974-9d61-8af289333b8d%2F9ad98710-6266-4642-ba62-dcef21ebfc13%2Fz6fcoy_processed.png&w=3840&q=75)
Transcribed Image Text:e. Determine the indirect costs assigned to Product B.
Indirect Costs
f. Determine the manufacturing cost per unit for Product A. (Round your answer to the nearest whole dollars.)
Manufacturing Cost
per unit
g. Determine the manufacturing cost per unit for Product B. (Round your answer to the nearest whole dollars.)
Manufacturing Cost
per unit
h. Determine the gross profit per unit for Product A. (Round your intermediate calculations and final answer to the nearest whole
dollars.)
Gross Profit
per unit
i. Determine the gross profit per unit for Product B. (Round your intermediate calculations and final answer to the nearest whole
dollars.)
Gross Profit
per unit
![Atlanta Systems produces two different products, Product A, which sells for $650 per unit, and Product B, which sells for $1,200 per
unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours
as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the
activity drivers are as follows:
Usage by
Product A
Usage by
Product B
Design (Engineering Hours)
Machining (Machine Hours)
Inspection (Batches)
Cost
$ 230,000
$2,600,000
$ 240,000
116
134
2,320
2,680
34
46
Atlanta manufactures 12,500 units of Product A and 10,172 units of Product B per month. Each unit of Product A uses $100 of direct
materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor.
Required:
a. Calculate the activity rate for design.
Rate for Design
per hour
b. Calculate the activity rate for machining.
Rate for Machining
per hour
c. Calculate the activity rate for inspection.
Rate for Inspection
per batch
d. Determine the indirect costs assigned to Product A.
Indirect Costs
e. Determine the indirect costs assigned to Product B.
Indirect Costs](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F2f1709b6-d6cf-4974-9d61-8af289333b8d%2F9ad98710-6266-4642-ba62-dcef21ebfc13%2Fbz0gzte_processed.png&w=3840&q=75)
Transcribed Image Text:Atlanta Systems produces two different products, Product A, which sells for $650 per unit, and Product B, which sells for $1,200 per
unit, using three different activities: Design, which uses Engineering Hours as an activity driver; Machining, which uses machine hours
as an activity driver; and Inspection, which uses number of batches as an activity driver. The cost of each activity and usage of the
activity drivers are as follows:
Usage by
Product A
Usage by
Product B
Design (Engineering Hours)
Machining (Machine Hours)
Inspection (Batches)
Cost
$ 230,000
$2,600,000
$ 240,000
116
134
2,320
2,680
34
46
Atlanta manufactures 12,500 units of Product A and 10,172 units of Product B per month. Each unit of Product A uses $100 of direct
materials and $45 of direct labor, while each unit of Product B uses $140 of direct materials and $75 of direct labor.
Required:
a. Calculate the activity rate for design.
Rate for Design
per hour
b. Calculate the activity rate for machining.
Rate for Machining
per hour
c. Calculate the activity rate for inspection.
Rate for Inspection
per batch
d. Determine the indirect costs assigned to Product A.
Indirect Costs
e. Determine the indirect costs assigned to Product B.
Indirect Costs
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