Question

Spin Cyde Aitecture uses the activity Boopy headaches at the heat the down $250,000and construction oversight $122.850. The cost versandduse areas mated the Cost Cast Drivers Drivers per Activity Initial concept formation Number of project changes 20 Design Suare feet 110.000 Construction oversight Number of month 105 (a) Compute the predetermined overhead rate for each city Initial concept formation $ per pretthange Coconvert () Cassy each of these activities as bevel the date of Activities Intial concept formation Design Construction over By ace this question Assistance, you learn what you can pois based on the post Potent vous into

Answer 1

Based on the information available in the question, we can answer as follows:-

Requirement A:-

The predetermined overhead activity rate for each activity is calculated as :-

=Total cost of the activity/Estimated use of cost drivers

Initial Concept Formation = $49,400/20

Inital Concept Formation = $2,470 per project change

(Note:- The cost of the Initial concept formation activity is not clearly visible. However, based on our observation it most probably resembles $49,400. Hence we have used the $49,400 in our calculation above. If it is $49,000, then the cost per project change will be = $2,450 per change)

Design = $260,000/130,000

Design = $2 per Square foot

Construction oversight = $122,850/ 105

Construction oversight = $1,170 per month

Requirement B:-

Initial Concept Formation - Product Level as the inital concept varies from product to product.

Design - Unit level as it varies from unit to unit.

Construction oversight - Batch level as the costs relate to the batch of units produced over the course of time(months).

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