Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools: Activity Cost Pool Estimated Overhead Cost Expected Activity Labor-related $ 19,600 10,000 direct labor-hours Machine-related $ 7,000 7,000 machine-hours Machine setups $ 23,400 600 setups Production orders $ 16,500 500 orders Product testing $ 22,400 800 tests Packaging $ 62,900 3,700 packages General factory $ 60,000 10,000 direct labor-hours 1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.) Labor Related Per DLH Machine Related Per MH Machine Setups Per Setup Production orders Per Order Product telling Per Test Packaging Per Package General Factory Per DLH
Variance Analysis
In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
Rustafson Corporation is a diversified manufacturer of consumer goods. The company's activity-based costing system has the following seven activity cost pools:
| Activity Cost Pool | Estimated |
Expected Activity | |
|---|---|---|---|
| Labor-related | $ 19,600 | 10,000 | direct labor-hours |
| Machine-related | $ 7,000 | 7,000 | machine-hours |
| Machine setups | $ 23,400 | 600 | setups |
| Production orders | $ 16,500 | 500 | orders |
| Product testing | $ 22,400 | 800 | tests |
| Packaging | $ 62,900 | 3,700 | packages |
| General factory | $ 60,000 | 10,000 | direct labor-hours |
1. Compute the activity rate for each activity cost pool. (Round your answers to 2 decimal places.)
| Labor Related | Per DLH | |
| Machine Related | Per MH | |
| Machine Setups | Per Setup | |
| Production orders | Per Order | |
| Product telling | Per Test | |
| Packaging | Per Package | |
| General Factory | Per DLH |
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