Required: 1. Determine the activity rate for each activity. Activity Rate /mh /setup /insp. /cust. ord. /req. 2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places. White Sugar Brown Sugar Powdered Sugar Production Setup Inspection Shipping Customer Service Total activity cost Activity cost per unit $

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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4.3 Pure Cane Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:
White sugar
Brown sugar
Powdered sugar
Total
Machine
Hours
2,000
1,250
1,250
4,500
Each product requires 0.25 machine hour per unit.
Production
Setup
Number of
Setups
Required:
1. Determine the activity rate for each activity.
Activity Rate
Inspection
Shipping
Customer Service
Total activity cost
Activity cost per unit
50
$
70
80
$
200
/mh
Number of
Inspections
100
160
240
500
Customer
Orders
410
1,100
800
2,310
Service
Requests
25
200
/setup
/insp.
/cust. ord.
/req.
2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places.
White Sugar
Brown Sugar
Powdered Sugar
120
345
Units
8,000
5,000
5,000
18,000
Transcribed Image Text:White sugar Brown sugar Powdered sugar Total Machine Hours 2,000 1,250 1,250 4,500 Each product requires 0.25 machine hour per unit. Production Setup Number of Setups Required: 1. Determine the activity rate for each activity. Activity Rate Inspection Shipping Customer Service Total activity cost Activity cost per unit 50 $ 70 80 $ 200 /mh Number of Inspections 100 160 240 500 Customer Orders 410 1,100 800 2,310 Service Requests 25 200 /setup /insp. /cust. ord. /req. 2. Determine the total and per-unit activity costs for all three products. Round "Activity cost per unit" answers to two decimal places. White Sugar Brown Sugar Powdered Sugar 120 345 Units 8,000 5,000 5,000 18,000
Activity
Production.
$247,500
48,000
12,500
69,300
27,600
$404,900
The activity bases identified for each activity are as follows:
Activity Base
Machine hours
Number of setups
Number of inspections
Number of customer orders
Number of customer service
requests
Setup
Inspection
Shipping
Customer service
Total
Activity
Production
Setup
Inspection
Shipping
Customer
service
The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:
White sunar
Activity Costs
Machine
Hours
2.000
Number of
Setups
50
Number of
Inspections
100
Number of
Customer
Orders
410
Number of
Customer
Service
Requests
25
Units
8.000
Transcribed Image Text:Activity Production. $247,500 48,000 12,500 69,300 27,600 $404,900 The activity bases identified for each activity are as follows: Activity Base Machine hours Number of setups Number of inspections Number of customer orders Number of customer service requests Setup Inspection Shipping Customer service Total Activity Production Setup Inspection Shipping Customer service The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: White sunar Activity Costs Machine Hours 2.000 Number of Setups 50 Number of Inspections 100 Number of Customer Orders 410 Number of Customer Service Requests 25 Units 8.000
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