Activity Rates and Activity-Based Product Costing
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant:
Deluxe | Regular | |
Quantity | 100,000 | 800,000 |
Selling price | $900 | $750 |
Unit prime cost | $529 | $483 |
In addition, the following information was provided so that overhead costs could be assigned to each product:
Activity Name | Activity Driver | Deluxe | Regular | Activity Cost |
Setups | Number of setups | 300 | 200 | $1,850,000 |
Machining | Machine hours | 100,000 | 300,000 | 40,000,000 |
Engineering | Engineering hours | 50,000 | 100,000 | 13,500,000 |
Packing | Packing orders | 100,000 | 400,000 | 450,000 |
Required:
1. Calculate the overhead rates for each activity. If required, carry your answers out to the nearest cent.
Setups | $ per setup |
Machining | $ per machine hour |
Engineering | $ per engineering hour |
Packing | $ per packing order |
2. Calculate the per-unit product cost for each product. Round your answers to the nearest whole dollar.
Deluxe | $per unit |
Regular | $per unit |
Activity rate = overhead cost/total activity
Setups = 1850,000/(300+200) =$3700 per set up
Machining = 40,000,000/(100,000+300,000) =$10 per machine hour
Engineering = 13500,000/150,000 =$90 per hour
Packing = 450,000/500,000 =$0.9 per order
2. Deluxe
Unit cost = 529+ (300*3700+100,000*10+50,000*90+100,000*0.9)/100,000
=$596 per unit
Regular = 499.375
Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of...
Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost...
Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 $750 Selling price $900 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost...
Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost...
Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost...
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 $900 800,000 $750 Selling price Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Setups Number of setups 300 Machining Machine hours...
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost Setups Number of setups 300 200...
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost Setups Number of setups 300 200...
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Regular Activity Cost Setups Number of setups 300 200...
Hammer Company produces a variety of electronic equipment. One of its plants produces two laser printers: the deluxe and the regular. At the beginning of the year, the following data were prepared for this plant: Deluxe Regular Quantity 100,000 800,000 Selling price $900 $750 Unit prime cost $529 $483 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Deluxe Activity Cost Regular 200 Setups Number of setups 300...
Adity a nd Activity and Product Casting Hammer Company produces a variety of ectronicament. One of its parts product the end there the beginning the year, the wing data were prepared for this Deluxe Regular Quantity 100.000 500.000 Selling price Unit grime cost 1900 $750 $529 r mation was provided In addition, the fo that had to b e d tech product: Activity Name Activity the De Regular Activity Cost Setups Number of setups $1,350,000 Machine Hours Machining 500.000 100,000...