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 ActivityActivity Cost PoolEstimated CostActivity cost driverBigToo BigFabrication$181,500Labor hours600500Painting$650,000Machine hours1,600300Finishing$2,750,000Units470530What are the activity rates for fabrication and painting?

Lets understand the basics. Activity rate is a rate calculate to allocate overhead cost to the…

Answered: Conspicuous Limo uses activity-based…

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter20: Activity-based Costing (abc)

Section: Chapter Questions

Problem 1R: Bumblebee Mobiles manufactures a line of cell phones. The management has identified the following...

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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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