Surratt Corp is projecting activity costs associated with producing disk drives, tapes drives, and wire drives. Indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below. What is the activity rate for the procurement activity cost pool? Activity Cost $ 370,000 Activity Base Procurement Scheduling Materials handling Product development 250,000 500,000 730,000 Number of purchase orders Number of production orders Number of moves Number of engineering changes Machine hours Production 1,500,000 Number Number of of Number Number of Machine Number Engineering Hours Changes Purchase Production of of Orders Orders Moves Units 2,000 Disk drives 4,000 300 1,400 10 2,000 Tape drives Wire drives 4,000 150 800 10 8,000 4,000 12,000 800 4,000 25 10,000 2,500

Surratt Corp is projecting activity costs associated with producing disk drives, tapes drives, and wire drives. Indirect labor can be traced to five separate activity pools. The budgeted activity cost and activity base data by product are provided below. What is the activity rate for the procurement activity cost pool? Activity Cost $ 370,000 Activity Base Procurement Scheduling Materials handling Product development 250,000 500,000 730,000 Number of purchase orders Number of production orders Number of moves Number of engineering changes Machine hours Production 1,500,000 Number Number of of Number Number of Machine Number Engineering Hours Changes Purchase Production of of Orders Orders Moves Units 2,000 Disk drives 4,000 300 1,400 10 2,000 Tape drives Wire drives 4,000 150 800 10 8,000 4,000 12,000 800 4,000 25 10,000 2,500

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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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Product Costing and Decision Analysis for a Service Company Pleasant Stay Medical Inc. wishes to determine its product costs. Pleasant Stay offers a variety of medical procedures (operations) that are considered its “products.” The overhead has been separated into three major activities. The annual estimated activity costs and activity bases follow: Activity Budgeted Activity Cost Activity Base Scheduling and admitting $432,000 Number of patients Housekeeping 4,212,000 Number of patient days Nursing 5,376,000 Weighted care unit Total costs $10,020,000 Total “patient days” are determined by multiplying the number of patients by the average length of stay in the hospital. A weighted care unit (wcu) is a measure of nursing effort used to care for patients. There were 192,000 weighted care units estimated for the year. In addition, Pleasant Stay estimated 6,000 patients and 27,000 patient days for the year. (The…
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Data concerning three of Kilmon Corporation’s activity cost pools appear below: Activity Cost Pools Estimated Overhead Cost Expected Activity Assembling products $ 65,540 4,520 assembly hours Designing products $ 578,112 3,011 product design hours Setting up batches $ 41,820 820 batch set-ups Required: Compute the activity rates for each of the three cost pools. (Round your answers to 2 decimal places.) Activities Activity rate Assembly products Designing products Setting up batches
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