Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $895,850, divided into four activities: fabrication, $396,000; assembly, $155,000; setup, $188,100; and inspection, $156,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 8,250 dlh 2 3,250 dlh59 setups 103 inspections Bass boat 24,750 7,750 436 722 33,000 dlh 31,000 dlh 495 setups 825 inspections Each product is budgeted for 3,000 units of production for the year a. Determine the activity rates for each activity. Fabrication $ per direct labor hour Assembly per direct labor hour per setup Setup Inspection $ per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. $ per unit Speedboat Bass boat $ per unit

Answer 1

Solution: Activity Cost Pool Fabrication assembly setup Inspection Overhead cost Expected activity Activity rate b c =a/b 396000 33000 12 per dlh 155000 31000 5 per dih 188100 380 per setup 156750 825 1 90 per inspection 495 Activity Cost Pool Fabrication assembly setup Inspection Total Overhead cost assigned / Units produced overhead cost per unit Expected Activity Overhead cost assigned Activity rate Speedboat Bass boat Speedboat Bass boat f=a*b g=a*c 8250 24750 99000 297000 23250 7750 116250 38750 380 59 436 22420 165680 190 722 195 70 137180 257240 638610 3000 3000 86 213 103