Clenney Corporation uses a plantwide overhead rate based on direct labor-hours. It is considering implementing an activity-based costing (ABC) system that allocates all of its manufacturing overhead to the four activity cost pools shown below.?Activity Cost PoolActivity MeasureTotal CostTotal Activity?MachiningMachine-hours$114,0006,000MHs?Machine setupsNumber of setups$100,000200setups?Product designNumber of products$96,0002products?General factoryDirect labor-hours$330,00010,000DLHsRequired:a. Under the proposed ABC system, what is the activity rate for the Machining activity cost pool?b. Under the proposed ABC system, what is the activity rate for the Machine Setups activity cost pool?c. Under the proposed ABC system, what is the activity rate for the Product Design activity
cost pool?d. Under the proposed ABC system, what is the activity rate for the General Factory activity cost pool?
What will be an ideal response?
a. through d. The activity rates would be computed as follows for the ABC system:
| ? | Activity Cost Pool | (a) Estimated Overhead Cost | (b) Expected Activity | (a) ÷ (b) Activity Rate | ||
| ? | Machining | $114,000 | 6,000 | MHs | $19 | per MH |
| ? | Machine setups | $100,000 | 200 | setups | $500 | per setup |
| ? | Product design | $96,000 | 2 | products | $48,000 | per product |
| ? | General factory | $330,000 | 10,000 | DLHs | $33 | per DLH |
You might also like to view...
The lag between when a change in policy is decided and when it is put into action is referred to as the _____ lag.
A. implementation B. recognition C. effectiveness D. decision
Translating the symbols used in a message for the purpose of interpreting its meaning is called __________.
Fill in the blank(s) with the appropriate word(s).
By showing appreciation and acknowledging team members' contribution, you _____
A) remind the team why the work is important B) acknowledge the emotions of team members C) make it possible for a team member to succeed D) help others feel pride in their work E) understand the emotions of team members
Thomas' Bike Shop stocks a high volume item that has a normally distributed demand during lead time. The average daily demand is 70 units, the lead time is 4 days, and the standard deviation of demand during lead time is 15
(a) How much safety stock provides a 95% service level to Thomas? (b) What should the reorder point be?