Pecan Inc. produces water valves. Overhead costs have been identified as follows: Activity PoolCostActivity DriverActivityQuality control$55,500Number of inspections185Material maintenance$87,400Number of machine hours19,000Setups$75,000Number of production runs60 Pecan makes 3 models of valves with the following details: ?EconomyStandardPremiumUnits produced20,00040,0007,000Number of inspections540140Machine hours4,50012,0002,500Production runs52035Required: a. Calculate the activity rate for each activity. b. Determine the amount of indirect costs assigned to each of the products.
What will be an ideal response?
| a. | Quality control | $300.00 | = | 55,500/185 |
| ? | Material maintenance | $4.60 | = | 87,400/19,000 |
| ? | Setups | $1,250.00 | = | 75,000/60 |
| b. | Economy | 28,450 | = | (5 × 300) + (4,500 × 4.60) + (5 × 1,250) |
| ? | Standard | 92,200 | = | (40 × 300) + (12,000 × 4.60) + (20 × 1,250) |
| ? | Premium | 97,250 | = | (140 × 300) + (2,500 × 4.60) + (35 × 1,250) |
Activity rate = Cost/Activity driver usage. Activity rate × Activity driver usage = Activity cost.
You might also like to view...
Which of the following statements is true about self-esteem?
A. It directly correlates to self-regard. B. It directly correlates to self-concept. C. It directly correlates to individual sameness. D. It directly correlates to the awareness of others.
___________________ are/is another skill set required of the HRM manager to help in decision making.
A. Empathy and sympathy B. Leadership and servitude C. Success and failure D. Conceptual and design skills E. Technical skills
The original purpose of the Civil Rights Act of 1964 was to address _____ in the United States.
A. gender discrimination B. age discrimination C. race discrimination D. disability discrimination
The warranty of___________refers to the quality of the personal property, and is a promise that the personal property is of usual and customary quality, and as such it is fit for its ordinary and intended use
Fill in the blank(s) with correct word