3. What if the machine hours were used for the plantwide rate? Would this remove the cost dis-tortion of a plantwide rate?Cornerstone Exercise 4.5 Activity-Based Product CostingOBRoberts Company produces two weed eaters: basic and advanced. The company has four activi-ties: machining, engineering, receiving, and inspection. Information on these activities and theirdrivers is given below.CCBasicAdvancedTotalUnits produced100,000$8,000,000100,000300,000Prime costs$30,000,000500,0003,6001,2001,600$38,000,000600,0004,0001,6002,400Machine hoursEngineering hoursReceiving ordersInspection hours400400800Overhead costs:MachiningEngineeringReceivingInspecting products$6,000,0002,000,000560,000360,000Required:1. Calculate the four activity rates.2. Calculate the unit costs using activity rates. Also, calculate the overhead cost per unit.3. What if consumption ratios instead of activity rates were used to assign costs instead ofactivity rates? Show the cost assignment for the inspection activity.Cornerstone Exercise 4.6 Assigning Cost of Resources to Activities, Unbundling theGeneral LedgerOBJE

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Description: 3. What if the machine hours were used for the plantwide rate? Would this remove the cost dis-tortion of a plantwide rate?Cornerstone Exercise 4.5 Activity-Based Product CostingOBRoberts Company produces two weed eaters: basic and advanced. The comp

Activity rates: Activity rates are calculated by dividing the budgeted activity costs by the amount…

Business

Accounting

Roberts Company produces two weed eaters: basic and advanced. The company has four activ ties: machining, engineering, receiving, and inspection. Information on these activities and the drivers is given below. Basic Advanced Total Units produced Prime costs 100,000 $8,000,000 300,000 $30,000,000 500,000 $38,000,000 600,000 Machine hours 100,000 Engineering hours Receiving orders Inspection hours 400 3,600 1,200 1,600 4,000 400 1,600 2,400 800 Overhead costs: Machining Engineering Receiving Inspecting products $6,000,000 2,000,000 560,000 360,000

Roberts Company produces two weed eaters: basic and advanced. The company has four activ ties: machining, engineering, receiving, and inspection. Information on these activities and the drivers is given below. Basic Advanced Total Units produced Prime costs 100,000 $8,000,000 300,000 $30,000,000 500,000 $38,000,000 600,000 Machine hours 100,000 Engineering hours Receiving orders Inspection hours 400 3,600 1,200 1,600 4,000 400 1,600 2,400 800 Overhead costs: Machining Engineering Receiving Inspecting products $6,000,000 2,000,000 560,000 360,000

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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