Question

Please please help me with this problem, theyre all together. Thank you so much!

Required information Gable Company uses three activity cost pools. Each pool has a cost driver. Information for Gable Company follows: Activity Cost Pools Machining Designing costs Setup costs Total Cost of Pool Cost Driver $345,220 Number of machine hours 79,900 Number of design hours 70,983 Number of batches Estimated Cost Driver 84,200 8,500 495 Required: 1. Compute the activity rate for each activity. 2. Classify each activity as facility product, batch, or unit level. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the activity rate for each activity. (Round your answers to 2 decimal places.) Activity Rate Activity Machining Design Costs Setup per Machine Hour per Design Hour per Batch

Answer 1

Solution :

(1) Activity Rate :

Activity	Activity Rate
Machining	$ 4.10 per MH
Designing	$ 9.40 per Designing Hour
Set Up	$ 143.40 per Setup

(2) Classification

Activity	Activity Rate
Machining	Unit Level
Designing	Product Level
Set Up	Batch Level

(3) Overhead Allocation :

	Total Overhead Assigned
Product A	$ 168,896
Product B	$ 214,438
Product C	$ 112,769

Working :

(1) Activity Rate :

Activity	Activity OH (a)	Activity Drivers (b)	Activity Rate (c = a / b)
Machining	$ 345,220	84,200 MH	$ 4.10 per MH
Designing	$ 79,900	8,500 Designing Hours	$ 9.40 per Designing Hour
Set Up	$ 70,983	495 Setups	$ 143.40 per Setup

(3) Overhead Allocation :

Activity	Activity Rate (a)	Product A	Product B	Product C
Activity Driver (b)	OH Allocated (a * b)	Activity Driver (c)	OH Allocated (a * c)	Activity Driver (d)	OH Allocated (a * d)
Machining	$ 4.10 per MH	32,000	$ 131,200	42,000	$ 172,200	10,200	$ 41,820
Designing	$ 9.40 per Designing Hour	3,400	$ 31,960	1,900	$ 17,860	3,200	$ 30,080
Set Up	$ 143.40 per Setup	40	$ 5,736	170	$ 24,378	285	$ 40,869
OH Assigned			$ 168,896		$ 214,438		$ 112,769

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