Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Regular Units produced 110,000 Deluxe Total 330,000 Prime costs $8,360,000 $38,280,000 $46,640,000 Machine hours 110,000 550,000 660,000 Engineering hours 300 2,700 3,000 Receiving orders 400 1,200 1,600 Inspection hours 600 1,200 1,800 Overhead costs: Machining $7,260,000 Engineering 1,410,000 Receiving 448,000 Inspecting products 270,000 Required: 1. Calculate the four activity rates. Machining rate per machine hour Engineering rate per hour Receiving rate per order Inspecting rate per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Regular Deluxe Unit cost per unit per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Regular Deluxe per unit per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Regular Deluxe Cost assignment

Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Regular Units produced 110,000 Deluxe Total 330,000 Prime costs $8,360,000 $38,280,000 $46,640,000 Machine hours 110,000 550,000 660,000 Engineering hours 300 2,700 3,000 Receiving orders 400 1,200 1,600 Inspection hours 600 1,200 1,800 Overhead costs: Machining $7,260,000 Engineering 1,410,000 Receiving 448,000 Inspecting products 270,000 Required: 1. Calculate the four activity rates. Machining rate per machine hour Engineering rate per hour Receiving rate per order Inspecting rate per hour 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Regular Deluxe Unit cost per unit per unit Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost Regular Deluxe per unit per unit 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Regular Deluxe Cost assignment

Name: Davis Company produces two hair dryers: regular and deluxe. The compa
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Description: Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below.Units producedRegularDeluxe330,000Total1

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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