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EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries. Supplies Factory expense EEI uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries. Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Batch Units Inspecting and Finishing 15% The activity cost drivers for the two products are summarized below. Activity Driver 15 10 Finishing hours Packing hours Packaging 5% Total 100% 100 100

EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries. Supplies Factory expense EEI uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries. Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Batch Units Inspecting and Finishing 15% The activity cost drivers for the two products are summarized below. Activity Driver 15 10 Finishing hours Packing hours Packaging 5% Total 100% 100 100

FINANCIAL ACCOUNTING
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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EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries Supplies Factory expense EEl uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Inspecting and Finishing 15% 15 10 The activity cost drivers for the two products are summarized below. Batch Units Activity Driver Packaging 5% Finishing hours Packing hours Total 100% 100 100
Transcribed Image Text:EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEI is as follows: Salaries Supplies Factory expense EEl uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEI has four activities: job setup, assembly, inspecting and finishing, and packaging. Salaries Supplies Factory expense Factory Costs $ 846,000 146,000 546,000 $ 1,538,000 Setup 20% 25 Activities Setup Assembly Inspect and finishing Packaging Assembly 60% 60 90 Inspecting and Finishing 15% 15 10 The activity cost drivers for the two products are summarized below. Batch Units Activity Driver Packaging 5% Finishing hours Packing hours Total 100% 100 100
Batches Units Finishing hours, per unit Packaging hours, per unit Materials per unit Required 1 Required 2 $ Required: 1. Determine the amount of the cost pool for each of the four activities. 2. Determine the activity-driver rates for assigning factory costs to the two products. 3. Determine the activity-based unit cost for each of the products. Complete this question by entering your answers in the tabs below. Required 3 Activity-based cost per unit Safe-V 210 56,000 0.30 0.20 4.00 $ Safe-T 560 68,000 0.20 0.10 5 Determine the activity-based unit cost for each of the products. (Round your intermediate calculations and final answers to 2 decimal places.) Safe-V Safe-T < Required 2 Required 3
Transcribed Image Text:Batches Units Finishing hours, per unit Packaging hours, per unit Materials per unit Required 1 Required 2 $ Required: 1. Determine the amount of the cost pool for each of the four activities. 2. Determine the activity-driver rates for assigning factory costs to the two products. 3. Determine the activity-based unit cost for each of the products. Complete this question by entering your answers in the tabs below. Required 3 Activity-based cost per unit Safe-V 210 56,000 0.30 0.20 4.00 $ Safe-T 560 68,000 0.20 0.10 5 Determine the activity-based unit cost for each of the products. (Round your intermediate calculations and final answers to 2 decimal places.) Safe-V Safe-T < Required 2 Required 3
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