Question

Obj. 4 activities are used in ed activity costs and Number of inspections EX 18-11 Activity rates and product costs using activity-based costing ✓ B. Dining room Garfield Inc. manufactures entry and dining room lighting fixtures. Five activities lighting fixtures, manufacturing the fixtures. These activities and their associated budgeted activi $167.40 per unit activity bases are as follows: Budgeted Activity Activity Cost Activity Base Casting 5560,000 Machine hours EXCEL TEMPLATE Assembly 75,000 Direct labor hours Inspecting 30,000 Setup 18.750 Number of setups Materials handling 14,000 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the products. The estimated activity-base usage quantities and units produced follow Activity Base Entry Total Machine hours 7.500 12,500 20,000 Direct labor hours 2.000 3,000 5,000 Number of inspections 500 250 750 Number of setups 150 100 Number of loads 250 400 300 Units produced 700 5,000 2.500 7,500 A Determine the activity rate for each activity. B. Use the activity rates in (A) to determine the total and per-unit activity costs associated with each product Dining

Answer 1

a) Activity rate

Activity	Budgeted cost	Budgeted driver	Activity rate
Casting	560000	20000 MH	28 per MH
Assembly	75000	5000 DLH	15 per DLH
Inspecting	30000	750 inspection	40 per inspection
Setup	18750	250 setup	75 per setup
Material handling	14000	700	20 per load

b) Calculate total and per unit cost

	Entry	Dining
Casting	210000	350000
Assembly	30000	45000
Inspecting	20000	10000
Setup	11250	7500
Material handling	8000	6000
Total Cost	279250	418500
Unit	5000	2500
Cost per unit	55.85	167.40