Compute activity rates and apply to jobs Fortunado Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: Total Budgeted Manufacturing Overhead Activity Allocation Base Cost Materials $6,400 Number of parts handling Machine setup 9,000 Number of setups Insertion of parts 54,400 Number of parts Finishing direct labor 89,700 | hours Finishing Total $159,500 Fortunado expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,200 parts, require 25 setups, and consume 2,300 hours of finishing time. Job 420 used 250 parts, required 3 setups, and consumed 130 finishing hours. Job 510 used 425 parts, required 6 setups, and consumed 320 finishing hours. Requirements 1. Compute the cost allocation rate for each activity.

Compute activity rates and apply to jobs Fortunado Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs for the upcoming year and their allocation bases are as follows: Total Budgeted Manufacturing Overhead Activity Allocation Base Cost Materials $6,400 Number of parts handling Machine setup 9,000 Number of setups Insertion of parts 54,400 Number of parts Finishing direct labor 89,700 | hours Finishing Total $159,500 Fortunado expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,200 parts, require 25 setups, and consume 2,300 hours of finishing time. Job 420 used 250 parts, required 3 setups, and consumed 130 finishing hours. Job 510 used 425 parts, required 6 setups, and consumed 320 finishing hours. Requirements 1. Compute the cost allocation rate for each activity.

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Description: Compute activity rates and apply to jobsFortunado Company uses ABC to account for its chrome wheel manufacturing process.Company managers have identified four manufacturing activities that incur manufacturingoverhead costs: materials handling, machi

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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