The total factory overhead for Norton Company is budgeted for the year at $300,000, divided into three activities: assembly, $200,000; setup, $50,000; and materials handling, $150,000. Norton manufactures two products: Product A and Product B. The activity-based usage quantities for each product by each activity are estimated as follows: Product A Assembly 2,000 dih Setup 8,000 dlh Materials Handling 5 setups Product B 10,000 dlh 24,000 dlh 15 setups Total activity-base usage 12,000 dlh 32,000 dlh 20 setups What is the activity rate for the assembly activity? a. $16.67 b. $25.00 c. $15.00 d. $1.67

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter4: Activity-based Costing
Section: Chapter Questions
Problem 3BE: Activity-based costing: factory overhead costs The total factory overhead for Bardot Marine Company...
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The total factory overhead for Norton Company is budgeted for the year at $300,000, divided into three activities: assembly, $200,000; setup, $50,000; and materials handling, $150,000. Norton
manufactures two products: Product A and Product B. The activity-based usage quantities for each product by each activity are estimated as follows:
Product A
Assembly
2,000 dih
Setup
8,000 dlh
Materials Handling
5 setups
Product B
10,000 dlh
24,000 dlh
15 setups
Total activity-base usage
12,000 dlh
32,000 dlh
20 setups
What is the activity rate for the assembly activity?
a. $16.67
b. $25.00
c. $15.00
d. $1.67
Transcribed Image Text:The total factory overhead for Norton Company is budgeted for the year at $300,000, divided into three activities: assembly, $200,000; setup, $50,000; and materials handling, $150,000. Norton manufactures two products: Product A and Product B. The activity-based usage quantities for each product by each activity are estimated as follows: Product A Assembly 2,000 dih Setup 8,000 dlh Materials Handling 5 setups Product B 10,000 dlh 24,000 dlh 15 setups Total activity-base usage 12,000 dlh 32,000 dlh 20 setups What is the activity rate for the assembly activity? a. $16.67 b. $25.00 c. $15.00 d. $1.67
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