Karla's bakery uses activity-based costing. Karla has several activities that she tracks: Dollars Activity Mixing $8,900 350 mixing hours Baking $7,400 950 baked goods Packaging $4,500 450 orders What cost would Karla estimate for 1 order of 3 bakes goods if she estimates that it will take 5 mixing hours?

Karla's bakery uses activity-based costing. Karla has several activities that she tracks: Dollars Activity Mixing $8,900 350 mixing hours Baking $7,400 950 baked goods Packaging $4,500 450 orders What cost would Karla estimate for 1 order of 3 bakes goods if she estimates that it will take 5 mixing hours?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter3: Cost Behavior

Section: Chapter Questions

Problem 21E: Sweet Dreams Bakery was started five years ago by Della Fontera who was known for her breads, sweet...

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Lucky Clothing creates and sells t-shirts that can be customized. The cost of sales order processing and shipping is calculated using activity-based costing at Lucky Clothing. The sales order processing activity has a $9 per sales order activity rate, and the shipping activity has a $18 per shipment activity rate. Lucky Clothing sold a total of 25,300 personalized t-shirts, including 4,000 orders and 1,300 shipping. The total activity cost is calculated through: Sales order activity costs = Number of orders * sales order activity rate = 4000*9 = $36,000Shipping Activity costs = Number of shipping * Shipping Activity rate= 1300*18 = $23400Total activity costs = Sales order activity costs + Shipping Activity costsWhile the per-unit sales order processing and shipping activity cost for customizable t-shirts is solved as follows:Per unit sales order processing costs = Sales order processing costs/ Number of t shirts = $36000 + $23400 = $59400 Per unit sales order processing costs = Sales…
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