Britelite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated activity costs and activity bases are as follows: Activity Costs Activity Activity Base (Budgeted) Casting $42,000 Machine hours Assembly 13,500 Direct labor hours Inspecting 5,800 Number of inspections Setup 16,800 Number of setups Materials handling 3,600 Number of loads Corporate records were abtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced for each product and in total are provided in the following table Activity Base Entry Dining Total Machine hours 800 600 1400 Direct labor hours 500 400 900 Number of inspections 140 150 290 Number of setups 80 60 140 Number of loads 50 40 90 Units produced 1,200 1,700 a. Determine the activity rate for each activity. Activity Activity Rate Casting mh Assembly dih Inspecting finsp. Setup /setup Materials handing Poad b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. If required, round your answers to two decimal places. Entry Lighting Dining Room Fixtures Lighting Fixtures Casting Assembly Inspecting Setup Materials handing Total activity cost Number of units Activity cost per unit
Britelite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated activity costs and activity bases are as follows: Activity Costs Activity Activity Base (Budgeted) Casting $42,000 Machine hours Assembly 13,500 Direct labor hours Inspecting 5,800 Number of inspections Setup 16,800 Number of setups Materials handling 3,600 Number of loads Corporate records were abtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced for each product and in total are provided in the following table Activity Base Entry Dining Total Machine hours 800 600 1400 Direct labor hours 500 400 900 Number of inspections 140 150 290 Number of setups 80 60 140 Number of loads 50 40 90 Units produced 1,200 1,700 a. Determine the activity rate for each activity. Activity Activity Rate Casting mh Assembly dih Inspecting finsp. Setup /setup Materials handing Poad b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. If required, round your answers to two decimal places. Entry Lighting Dining Room Fixtures Lighting Fixtures Casting Assembly Inspecting Setup Materials handing Total activity cost Number of units Activity cost per unit
Chapter1: Financial Statements And Business Decisions
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Transcribed Image Text:Activity Rates and Product Costs Using Activity-Based Costing
BriteLite Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated activity costs and activity bases are as follows:
Activity Costs
Activity
Activity Base
(Budgeted)
Casting
$42,000
Machine hours
Assembly
13,500
Direct labor hours
Inspecting
5,800
Number of inspections
Setup
16,800
Number of setups
Materials handling
3,600
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 for each product and in total are provided in the following table:
Activity Base
Entry
Dining
Total
Machine hours
800
600
1400
Direct labor hours
500
400
900
Number of inspections
140
150
290
Number of setups
80
60
140
Number of loads
50
40
90
Units produced
1,200
500
1,700
a. Determine the activity rate for each activity.
Activity
Activity Rate
Casting
mh
Assembly
dih
Inspecting
finsp.
Setup
/setup
Materials handling
fioad
b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. If required, round your answers to two decimal places.
Dining Room
Lighting Fixtures
Entry Lighting
Fixtures
Casting
Assembly
Inspecting
Setup
Materials handling
Total activity cost
Number of units
Activity cost per
unit
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