Use this information for Miramar Industries to answer the question that follow. Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Activity Cost Activity Base Production setup $250,000 Number of setups Material handling 150,000 Number of parts General overhead 80,000 Number of direct labor hours Each product's total activity in each of the three areas are as follows: Product A Product B Number of setups 100 300 Number of parts 40,000 20,000 Number of direct labor hours 8,000 12,000 What is the activity rate for materials handling? a.$3.75 per part b.$1.50 per part c.$7.50 per part d.$2.50 per part
Use this information for Miramar Industries to answer the question that follow. Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities: Activity Cost Activity Base Production setup $250,000 Number of setups Material handling 150,000 Number of parts General overhead 80,000 Number of direct labor hours Each product's total activity in each of the three areas are as follows: Product A Product B Number of setups 100 300 Number of parts 40,000 20,000 Number of direct labor hours 8,000 12,000 What is the activity rate for materials handling? a.$3.75 per part b.$1.50 per part c.$7.50 per part d.$2.50 per part
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Use this information for Miramar Industries to answer the question that follow.
Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
Each product's total activity in each of the three areas are as follows:
What is the activity rate for materials handling?
Miramar Industries manufactures two products: A and B. The manufacturing operation involves three overhead activities—production setup, materials handling, and general factory activities. Miramar uses activity-based costing to allocate overhead to products. An activity analysis of the overhead revealed the following estimated costs and activity bases for these activities:
| Activity | Cost | Activity Base |
| Production setup | $250,000 | Number of setups |
| Material handling | 150,000 | Number of parts |
| General overhead | 80,000 | Number of direct labor hours |
Each product's total activity in each of the three areas are as follows:
| Product A | Product B | |
| Number of setups | 100 | 300 |
| Number of parts | 40,000 | 20,000 |
| Number of direct labor hours | 8,000 | 12,000 |
What is the activity rate for materials handling?
a.$3.75 per part
b.$1.50 per part
c.$7.50 per part
d.$2.50 per part
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