Conspicuous Limo uses activity-based costing for its two models of stretch Hummer limousines: Big and Too Big. There are three activity cost pools related to production, with estimated costs and expected activity as follows: Amount of Activity Activity Cost Pool Estimated Cost Activity cost driver Big Too Big Fabrication $181,500 Labor hours 600 500 Painting $650,000 Machine hours 1,600 300 Finishing $2,750,000 Units 470 530 What are the activity rates for fabrication and painting?
Conspicuous Limo uses activity-based costing for its two models of stretch Hummer limousines: Big and Too Big. There are three activity cost pools related to production, with estimated costs and expected activity as follows: Amount of Activity Activity Cost Pool Estimated Cost Activity cost driver Big Too Big Fabrication $181,500 Labor hours 600 500 Painting $650,000 Machine hours 1,600 300 Finishing $2,750,000 Units 470 530 What are the activity rates for fabrication and painting?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Conspicuous Limo uses activity-based costing for its two models of stretch Hummer limousines: Big and Too Big. There are three activity cost pools related to production, with estimated costs and expected activity as follows:
| Amount of Activity | ||||
| Activity Cost Pool | Estimated Cost | Activity cost driver | Big | Too Big |
| Fabrication | $181,500 | Labor hours | 600 | 500 |
| Painting | $650,000 | Machine hours | 1,600 | 300 |
| Finishing | $2,750,000 | Units | 470 | 530 |
What are the activity rates for fabrication and painting?
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