Chipman Incorporated, produces water pumps. Overhead costs have been identified as follows: Activity Pool Material handling Cost $ 78,000.00
Chipman Incorporated, produces water pumps. Overhead costs have been identified as follows: Activity Pool Material handling Cost $ 78,000.00
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Chipman Incorporated, produces water pumps. Overhead costs have been identified as follows:
Activity Pool
Material handling
Machine maintenance
Setups
Cost Driver
Number of moves
Units produced
Number of moves
Machine hours
Production runs
Cost
Economy
10,100
203
9,250
24
$ 78,000.00
75,800.00
84,320.00
Total Activity
Number of machine hours
Number of production runs
Chipman makes three models of pumps with the following activity demands:
500
37,900
68
Standard
21,400
127
20,700
11
Premium
3,535
170
7,950
33
Required:
a. Calculate the activity rate for each activity.
b. Determine the amount of indirect costs assigned to each of the products.
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