Homework Answers
Question 1
| A | B | C=A/B | ||
| Particulars | Estimated Cost per Activity | Cost Driver Quantity | Cost Driver Rate | |
| Setup | 153,000 | 850 | 180 | Per Setup |
| Equipment and Maintenance Costs | 108,000 | 22,500 | 4.80 | Per Machine Hour |
| Lease Rent | 210,000 | 10,000 | 21 | Per Square Footage |
| Total Overhead | 471,000 |
Note
Cost Driver Quantity = Cost Driver Quantity for Basketball + Cost Driver Quantity for Volleyballs
Cost Driver for Lease Rent is 10,000 Square Feet.
Question 2
Cost of Unused Capacity = Unused Area * Cost Driver Rate for Lease Rent
Unused Area = 3,000 Square Feet
Cost of Unused Capacity = 3,000 * $ 21
Cost of Unused Capacity = $ 63,000
Question 3
| Particulars | Basketballs | Volleyballs | Total |
| Direct Materials | 198,350 | 276,150 | 474,500 |
| Direct Manufacturing Labour | 111,800 | 110,300 | 222,100 |
| Setup | 45,000 | 108,000 | 153,000 |
| Equipment and Machine Maintenance Costs | 48,000 | 60,000 | 108,000 |
| Lease Rent | 72,450 | 74,550 | 147,000 |
| Budgeted Total Costs | 475,600 | 629,000 | 1,104,600 |
| Number of Units | 58,000 | 85,000 | |
| Budgeted Cost per Unut | 8.20 | 7.40 |
Requirement 4
Part 1
Options A, B and D are Correct Answers.
Part 2
Options A, B and C are Correct Answers.
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