Homework Answers
| Answer: | |||
| 1) | |||
| Capacity cost rate = | Total Resource Costs / Total hours | $ 630,000 / 20,000 hours | $ 31.50 per hour |
| 2) | ||
| Activity Rates | ||
| Creating BOMs | $ 15.75 ( $ 31.50 x 0.5 hr ) |
per BOM |
| Designing tools | $ 170.10 ( $ 31.50 x 5.4 hrs ) |
per tool design |
| Improving processes | $ 31.50 ( $ 31.50 x 1 hr ) |
per process improvement hr. |
| Training employees | $ 63 ( $ 31.50 x 2 hrs ) |
per training session |
| Studying capabilities | $ 31.50 ( $ 31.50 x 1 hr ) |
per study hour |
| 3) | ||
| Job 150 | Job 151 | |
| TDABC |
$
1,701 ( $ 170.10 x 10 ) |
$
3,402 ( $ 170.10 x 20 ) |
| ABC |
$
1,790 ( $ 179,000 / 1,000 x 10 ) |
$
3,580 ($ 179,000 / 1,000 x 20 ) |
| 4) | |||
| BOM time = | 0.50 (Standard product) | + | 0.30 (Custom Product ) |
|
Activity rate for the activity of
creating a BOM = Capacity cost rate x BOM time = $ 31.50 x 0.80 |
$ 25.20 $ per BOM |
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