Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 281,000 Number of parts Material insertion 3,060,000 Number of parts Automated machinery 873,000 Machine hours Finishing 194,000 Direct labor hours Packaging 194,000 Orders shipped Total $ 4,602,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 14,300 9,700 2,600 Orders to be shipped 1,910 580 270 Number of parts per unit 15 20 25 Machine hours per unit 1 2 5 Labor hours per unit 3 3 3 What is Barnett’s pool rate for the packaging activity?
Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below. Activity Cost Cost Driver Material handling $ 281,000 Number of parts Material insertion 3,060,000 Number of parts Automated machinery 873,000 Machine hours Finishing 194,000 Direct labor hours Packaging 194,000 Orders shipped Total $ 4,602,000 The following information pertains to the three product lines for next year: Economy Standard Deluxe Units to be produced 14,300 9,700 2,600 Orders to be shipped 1,910 580 270 Number of parts per unit 15 20 25 Machine hours per unit 1 2 5 Labor hours per unit 3 3 3 What is Barnett’s pool rate for the packaging activity?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.
| Activity | Cost | Cost Driver | ||||
| Material handling | $ | 281,000 | Number of parts | |||
| Material insertion | 3,060,000 | Number of parts | ||||
| Automated machinery | 873,000 | Machine hours | ||||
| Finishing | 194,000 | Direct labor hours | ||||
| Packaging | 194,000 | Orders shipped | ||||
| Total | $ | 4,602,000 | ||||
The following information pertains to the three product lines for next year:
| Economy | Standard | Deluxe | |||||||||
| Units to be produced | 14,300 | 9,700 | 2,600 | ||||||||
| Orders to be shipped | 1,910 | 580 | 270 | ||||||||
| Number of parts per unit | 15 | 20 | 25 | ||||||||
| Machine hours per unit | 1 | 2 | 5 | ||||||||
| Labor hours per unit | 3 | 3 | 3 | ||||||||
What is Barnett’s pool rate for the packaging activity?
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