Activity Rates and Product Costs using Activity-Based CostingLonsdale 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:ActivityBudgetedActivity CostActivity BaseCasting$338,910 Machine hoursAssembly163,940 Direct labor hoursInspecting27,500 Number of inspectionsSetup34,250 Number of setupsMaterials handling38,400 Number of loadsCorporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:Activity BaseEntryDiningTotalMachine hours5,440 4,830 10,270 Direct labor hours4,680 7,030 11,710 Number of inspections1,900 600 2,500 Number of setups200 50 250 Number of loads760 200 960 Units produced10,800 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.ActivityActivity Rate Casting$per machine hourAssembly$per direct labor hourInspecting$per inspectionSetup$per setupMaterials handling$per loadb. 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.ProductTotal Activity CostActivity Cost Per UnitEntry Lighting Fixtures$$Dining Room Lighting Fixtures$$ Chapter 4E CalculatoreBookLonsdale 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 as1. EX.04.01follows:2. EX.04.02BudgetedActivityActivity Cost Activity Base3. EX.04.06Casting$338,910Machine hours4. EX.04.11.ALGOAssemblyDirect labor hours163,94027,500Number of inspectionsInspectingNumber of setupsSetup34,250Materials handlingNumber of loads38,400Corporate 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 BaseDiningEntryTotalMachine hours5,4404,83010,2704,680Direct labor hours7,03011,710Number of inspections1,9006002,500Number of setups20050250Number of loads760200960Units produced10,8005,40016,200a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.ActivityActivity RateCastingper machine hourAssemblyper direct labor hourInspectingper inspectionSetupper setupMaterials handlingper loadb. 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.Total Activity CostActivity Cost Per UnitProductEntry Lighting FixturesDining Room Lighting FixturesPreviousCheck My WorkProgress: 4/4 items

Activity based costing is a technique of assigning cost under which the activities involved in…

Chapter 4 E Calculator eBook 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 1. EX.04.01 follows: 2. EX.04.02 Budgeted Activity Activity Cost Activity Base 3. EX.04.06 Casting $338,910 Machine hours 4. EX.04.11.ALGO Assembly Direct labor hours 163,940 27,500 Number of inspections Inspecting Number of setups Setup 34,250 Materials handling Number of loads 38,400 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 Dining Entry Total Machine hours 5,440 4,830 10,270 4,680 Direct labor hours 7,030 11,710 Number of inspections 1,900 600 2,500 Number of setups 200 50 250 Number of loads 760 200 960 Units produced 10,800 5,400 16,200 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting per machine hour Assembly per direct labor hour Inspecting per inspection Setup per setup Materials handling 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. Total Activity Cost Activity Cost Per Unit Product Entry Lighting Fixtures Dining Room Lighting Fixtures Previous Check My Work Progress: 4/4 items

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

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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:

Activity	Budgeted Activity Cost	Activity Base
Casting	$338,910		Machine hours
Assembly	163,940		Direct labor hours
Inspecting	27,500		Number of inspections
Setup	34,250		Number of setups
Materials handling	38,400		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	5,440		4,830	10,270
Direct labor hours	4,680		7,030	11,710
Number of inspections	1,900		600	2,500
Number of setups	200		50	250
Number of loads	760		200	960
Units produced	10,800		5,400	16,200

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting	$	per machine hour
Assembly	$	per direct labor hour
Inspecting	$	per inspection
Setup	$	per setup
Materials handling	$	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.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures	$	$
Dining Room Lighting Fixtures	$	$

Chapter 4
E Calculator
eBook
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
1. EX.04.01
follows:
2. EX.04.02
Budgeted
Activity
Activity Cost Activity Base
3. EX.04.06
Casting
$338,910
Machine hours
4. EX.04.11.ALGO
Assembly
Direct labor hours
163,940
27,500
Number of inspections
Inspecting
Number of setups
Setup
34,250
Materials handling
Number of loads
38,400
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
Dining
Entry
Total
Machine hours
5,440
4,830
10,270
4,680
Direct labor hours
7,030
11,710
Number of inspections
1,900
600
2,500
Number of setups
200
50
250
Number of loads
760
200
960
Units produced
10,800
5,400
16,200
a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.
Activity
Activity Rate
Casting
per machine hour
Assembly
per direct labor hour
Inspecting
per inspection
Setup
per setup
Materials handling
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.
Total Activity Cost
Activity Cost Per Unit
Product
Entry Lighting Fixtures
Dining Room Lighting Fixtures
Previous
Check My Work
Progress: 4/4 items

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