Google Inc. produces and distributes two types of products, Standard and Deluxe. Budgeted cost and activity for each of its three activity cost pools are shown below. The company plans to produce and sell 120,000 standard units and 80,000 deluxe units. Budgeted Activity Cost Driver or Base finished units parts Production setups setups Activity Cost Pool Packaging Material handling Budgeted Cost $100,000 $49,600 $120,000 Standard 120,000 finished units 600,000 total parts 6 total setups Required: a. Determine the activity rate for each activity cost pool. Deluxe 80,000 finished units 640,000 total parts 14 total setups b. Determine the activity-based cost per total production of each product (Standard & Deluxe). c. Determine the activity-based cost per unit of each product (Standard & Deluxe).
Google Inc. produces and distributes two types of products, Standard and Deluxe. Budgeted cost and activity for each of its three activity cost pools are shown below. The company plans to produce and sell 120,000 standard units and 80,000 deluxe units. Budgeted Activity Cost Driver or Base finished units parts Production setups setups Activity Cost Pool Packaging Material handling Budgeted Cost $100,000 $49,600 $120,000 Standard 120,000 finished units 600,000 total parts 6 total setups Required: a. Determine the activity rate for each activity cost pool. Deluxe 80,000 finished units 640,000 total parts 14 total setups b. Determine the activity-based cost per total production of each product (Standard & Deluxe). c. Determine the activity-based cost per unit of each product (Standard & Deluxe).
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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