Question

7. A company has two products: Basic and Deluxe. It uses activity-based costing and has prepared the following analysis showing budgeted costs and activities. 16,000 units, Annual production of Basic is 28.00 Annual production of Deluxe is - 12,000 units. Product Basie Product Deluxe Total Activity Cost Pool Budgeted Overhead Cost $ 170,000 Machining 600 Machine hours 1400 Machine Hours 800 Machine Hours 600 setups 800 setups 1400 Setups S 145,000 Setups 450 Batches 1100 Batches 650 Batches $ 160,000 Batches 1400 A. Compute the company's activity rates under activity-based costing for each of the three activities. (two decimal places) rest fool totay driver inte 16,000 121.43 Machining Ratels S Setup Rate is 10357 .0875 Batches Rate is $ 145.45

Answer 1

	Product Basic	Product Deluxe
Machining Cost:
600 machine hrs * $121.42857	$                                72,857
800 machine hrs * $121.42857		$                                    97,143
Setup Cost:
600 setups * $103.57143	$                                62,143
800 setups * $103.57143		$                                    82,857
Batch Cost:
450 batches * $145.45454	$                                65,455
650 batches * $145.45454		$                                    94,545
Total Overhead Costs	$                             2,00,455	$                                 2,74,545
No. of units produced	16000	12000
Overhead Costs per unit	$                                  12.53	$                                      22.88