Question

Score: 0 of 1 pt 2 of 11 (1 complete) HW Score: 5.88%, 1 of 17 pts S4-4 (book/static) Question Help NatureMade Snacks produces different styles of sweet potato chips (ruffled, flat, thick-cut, gourmet) for different corporate customers Compute the activity cost allocation rates for each activity assuming the following total estimated activity for the year: 8,500 preparation hours, 32,000 cooking and draining hours, and 4 million packages (Click the icon to view additional information.) 囲(Click the icon to view the additional information and data.) Begin by determining the formula for calculating activity cost allocation rate, then calculate the rates for each activity. (Round the rate to the nearest cent.) Activity cost allocation rate - More Info 1 Data Table Each style of sweet potato chip requires different preparation time, different cooking and draining times (depending on desired fat content), and different packaging (single serving versus bulk). Therefore, NatureMade has decided to try ABC to better capture the manufacturing overhead costs incurred by each style of NatureMade has identified the following activities related to yearly manufacturing overhead costs and cost drivers associated with producing sweet potato chips: Manufacturing Activity Preparation.... Cooking and draining$ 928,000 Cooking and draining time Packaging Overhead Cost Driver $ 510,000 Preparation time Print Done $ 400,000 Units packaged

Answer 1

under abc costing overhead rate will be computed using the formula -
	Cost pool total/Cost driver
Activity		Formula
Preparation		Preparation manufacturing overhead / number of preparation hr
Cooking and draining		Cooking and draining manufacturing overhead / number of cooking and draining hr
Packing		Packing manufacturing overhead / unit packed
Computation of activity rate
	Cost pool amount	Cost driver unit		Over head rate	Cost driver
Preparation	510000	8500		$   60.00	per preparation hr
Cooking and draining	928000	32000		$   29.00	per cooking and draining hr
Packing	400000	4000000		$     0.10	per unit packed