Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows: 1 Assembly Department $275,736.00 2 Test and Pack Department 201,046.00 3 Total $476,782.00 The direct labor information for the production of 8,390 units of each product is as follows: Department Assembly Test and Pack Blender 740 dlh 2,040 dlh Toaster oven 2,205 680 Total 2,945 dlh 2,720 dlh Four Finger Appliance used direct labor hours to allocate production department factory overhead to products. The management of Four Finger Appliance Company has asked you to use activity-based costing instead of direct labor hours to allocate factory overhead costs to the two products. You have determined that $81,366 of factory overhead from each of the production departments can be associated with setup activity ($162,732 in total). Company records indicate that blenders required 142 setups, while the toaster ovens required only 49 setups. Each product has a production volume of 8,390 units. Required: Complete the Activity Tables for blenders and toaster ovens. a. Determine the three activity rates (assembly, test and pack, and setup).* b. Determine the total factory overhead and factory overhead per unit allocated to each product using the activity rates in (a).* *If required, round all per-unit answers to the nearest cent.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

Four Finger Appliance Company manufactures small kitchen appliances. The product line consists of blenders and toaster ovens. Four Finger Appliance presently uses the multiple production department factory overhead rate method. The factory overhead is as follows:

1	Assembly Department	$275,736.00
2	Test and Pack Department	201,046.00
3	Total	$476,782.00

The direct labor information for the production of 8,390 units of each product is as follows:

	Department
	Assembly	Test and Pack
Blender	740 dlh	2,040 dlh
Toaster oven	2,205	680
Total	2,945 dlh	2,720 dlh

Four Finger Appliance used direct labor hours to allocate production department factory overhead to products.

The management of Four Finger Appliance Company has asked you to use activity-based costing instead of direct labor hours to allocate factory overhead costs to the two products. You have determined that $81,366 of factory overhead from each of the production departments can be associated with setup activity ($162,732 in total). Company records indicate that blenders required 142 setups, while the toaster ovens required only 49 setups. Each product has a production volume of 8,390 units.

Required:

Complete the Activity Tables for blenders and toaster ovens.

Determine the three activity rates (assembly, test and pack, and setup).*

Determine the total factory overhead and factory overhead per unit allocated to each product using the activity rates in (a).*

*If required, round all per-unit answers to the nearest cent.

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 3 steps with 3 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions