Question

EX 4-12 Activity cost pools, activity rates, and product costs using Obj. 4 activity-based costing B. Ovens, $93.80 Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens per unit and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base informa- tion are provided as follows: Activity Pool EXCEL TEMPLATE Activity Cost Activity Base Procurement Scheduling Materials handling Product development Total cost $ 12,600 90,000 11,000 50,000 $163,600 Number of purchase orders Number of production orders Number of moves Number of engineering changes

Answer 1

Activity	Activity Base	Expense Amount	Total	Activity Rate for each activity cost pool	Ovens	Refrigerators
Procurement	Number of Purchase Orders	12600	700	18	7,200	5,400
					(400*18)	(300*18)
Scheduling	Number of Production Orders	90000	1200	75	60,000	30,000
					(800*75)	(400*75)
Material Handling	Number of Moves	11000	500	22	6,600	4,400
					(300*22)	(200*22)
Product Development	Number of Engineering Changes	50000	200	250	20,000	30,000
					(80*250)	(120*250)
Total Cost					93,800	69,800
Units					1,000	500
Activity Based Cost Per Unit					94	140