ctivity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Hour Vaquero Vaquera Cutting hours 3,300 5,100 Assembly hours 2,650 4,350 Inspection hours 865 2,420 Rework hours 100 500 The following activity data have been collected: Activity Amount Cutting $218,400 Assembling $210,000 Inspecting $72,270 Reworking $45,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

ctivity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Hour Vaquero Vaquera Cutting hours 3,300 5,100 Assembly hours 2,650 4,350 Inspection hours 865 2,420 Rework hours 100 500 The following activity data have been collected: Activity Amount Cutting $218,400 Assembling $210,000 Inspecting $72,270 Reworking $45,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter12: Activity-based Management

Section: Chapter Questions

Problem 8E: Thayne Company has 30 clerks that work in its Accounts Payable Department. A study revealed the...

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Hour	Vaquero	Vaquera
Cutting hours	3,300	5,100
Assembly hours	2,650	4,350
Inspection hours	865	2,420
Rework hours	100	500

Activity	Amount
Cutting	$218,400
Assembling	$210,000
Inspecting	$72,270
Reworking	$45,000

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Activity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero Vaquera Cutting hours 2,300 5,400 Assembly hours 2,800 4,650 Inspection hours 875 2,430 Rework hours 200 450 The following activity data have been collected: Cutting $169,400 Assembling $298,000 Inspecting $66,100 Reworking $39,000 Required: Calculate the activity rates that would be used to assign costs to each product. If required, round your answers to the nearest cent. Cutting: per cutting hour Assembling: per assembling hour Inspecting: per inspecting hour Reworking: per reworking hour
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Activity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero Vaquera Cutting hours 2,000 5,400 Assembly hours 2,900 4,650 Inspection hours 525 2,430 Rework hours 100 450 The following activity data have been collected: Cutting $177,600 Assembling $339,750 Inspecting $47,280 Reworking $33,000 Required: Calculate the activity rates that would be used to assign costs to each product. If required, round your answers to the nearest cent. Cutting: $fill in the blank 1 per cutting hour Assembling: $fill in the blank 2 per assembling hour Inspecting: $fill in the blank 3 per inspecting hour Reworking: $fill in the blank 4 per reworking hour
Activity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero Vaquera Cutting hours 4,000 5,900 Assembly hours 2,650 4,750 Inspection hours 945 2,390 Rework hours 200 600 The following activity data have been collected: Cutting $277,200 Assembling $222,000 Inspecting $53,360 Reworking $48,000 This information has been collected in the Microsoft Excel Online file. Open the spreadsheet, perform the required analysis, and input your answers in the question below.
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The following table presents the activities and activity drivers that LampPlus uses in manufacturing Product 1 and Product 2. Complete the table: Activity Design Preparation Machining Finishing Inspection Packaging Shipping Cost Activity Driver $ 39,060 Design time $ 67,650 Labor hours 105,200 Machine hours $ Batches Units Orders $ 12,720 Packages Driver Usage Prod. 1 840 3,130 209 76 Prod. 2 1,330 hours hours 300 56 Activity Rate $ $ $ $ /hour /hour 20 /hour 50 /batch 17 /unit 302 /order /package Activity Cost:Prod. 1 $ $ $ $ 34,430 31,200 Activity Cost:Prod. 2 9,690 $ 12,986 $ 19,720 3,600
Life Force Fitness, Inc., assembles and sells treadmills. Activity-based product information for each treadmill is as follows: ETT Activity-Base Usage (hrs. per unit) Activity Rate per Hour Activity Motor assembly Activity Cost $30.00 1.50 $20 Final assembly Testing 1.00 18 18.00 0.25 22 5.50 Rework 0.40 22 8.80 Moving Activity cost per unit 3.00 $65.30 0.20 15 All of the activity costs are related to labor. Management must remove $2.00 of activity cost from the product in order to remain competitive. Rework involves disassembling and repairing a unit that fails testing. Not all units require rework, but the average is 0.40 hour per unit. Presently, the testing is done on the completed assembly; but much of the rework has been related to motors, which can be tested independently prior to adding the motor to the treadmill during final assembly. Thus, motor issues can be diagnosed and solved without having to disassemble the complete treadmill. This change will reduce the average rework…
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Roll Board Inc. manufactures several models of high-quality skateboards. The company’s ABC system has four activity cost pools, which are listed below along with their activity measures and activity rates: Activity Cost Pool Activity Measure Activity Rate Supporting direct labour Number of direct labour-hours $ 9 per direct labour-hour Batch processing Number of batches $ 43 per batch Order processing Number of orders $ 88 per order Customer service Number of customers $ 102 per customer The company just completed a single order from SkateCo for 1,350 entry-level skateboards. The order was produced in 28 batches. Each skateboard required 1.4 direct labour-hours. The selling price was $125 per skateboard, the direct materials cost was $68.80 per skateboard, and the direct labour cost was $17.70 per direct labour-hour. This was the only order from SkateCo for the year. Required: Prepare a report showing the customer margin on sales to SkateCo for the year.
Larsen, Inc., produces two types of electronic parts and has provided the following data: Part X12 Part YK7 Total Units produced 100,000 600,000 — Direct labor hours 30,000 70,000 100,000 Machine hours 50,000 300,000 350,000 Number of setups 40 80 120 Testing hours 1,000 9,000 10,000 Number of purchase orders 500 3,500 4,000 There are four activities: machining, setting up, testing, and purchasing. Required: Calculate the activity consumption ratios for each product. Calculate the consumption ratios for the plantwide rate (direct labor hours). When compared with the activity ratios, what can you say about the relative accuracy of a plant wide rate? Which product is under costed? What if the machine hours were used…
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Harbour Company makes two models of electronic tablets, the Home and the Work. Basic production information follows: Direct materials cost per unit Direct labor cost per unit Sales price per unit Expected production per month Harbour has monthly overhead of $168,340, which is divided into the following activity pools: Setup costs Quality control Maintenance Total Number of setups Number of inspections Number of machine hours $86,400 54,940 27,000 $ 168,340 The company also has compiled the following information about the chosen cost drivers: Home 37 340 1,600 Required 1 Home Required 2 Required 3 $ 41 16 360 770 units Work 71 330 1,100 Home Model Work Model Total Overhead Cost Required: 1. Suppose Harbour uses a traditional costing system with machine hours as the cost driver. Determine the amount of overhead assigned to each product line. 2. Calculate the production cost per unit for each of Harbour's products under a traditional costing system. 3. Calculate Harbour's gross margin per…