Question

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Bluefield has decided to use an ABC costing system and has identified the following detailed information about its cost pools and cost drivers: Activity cost pools Materials handling Machine maintenance $65,280 $8,580 Cost drivers Number of material moves Number of machine hours 510 39,000 Required: 1. Calculate Bluefield's activity rate for each cost pool. 2. Determine the amount of overhead assigned to Bluefield's products if each has the following activity demands: Product A Product 3 Number of material moves Number of machine hours 16,400 22,600 270 240 es Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate Bluefield's activity rate for each cost pool. (Round your final answer for per material moves to nearest dollar amount and per machine hour to 4 decimal places.) Activity Rate Material Handling Machine Maintenance per Material Move per Machine Hour

Answer 1

Answer:-

Part 1(a) - Calculation of activity rate

Machine Maintenance overhead relate to Machine Hours directly and Material Handling relate to Material Moves Directly

Particulars	Activity Rate
Material Handling	$128 ($65,280 Cost/510 Moves)	Per Material Move
Machine Maintenance	$0.22 ($8,580 Cost/39,000 Hours)	Per Machine Hour

Part 2 - Overhead assignment

Particulars	Amount
Product A [($128 Per Move*270 Moves) + ($0.22 Per Hour*16400 Hour)]	$38,168
Product B [($128 Per move*240 Moves) + ($0.22 Per Hour*22600 Hour)]	$35,692

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