Question

the following information to answer Questions 14-20 beam manufactures medical imaging equipment. The company has identified several over activities and the activity drivers for the coming year: Activity Setting up Inspecting Grinding Servicing Expected Cost $60,000 $45,000 $90,000 To be calculated Activity Driver Activity Capacity Number of setups 300 Inspection hours 4,500 Machine hours 18.000 Number of parts 50,000 The company produces several different scanners sed hv hosnitals and clinics. The cost information for two types of these scanners are as follows: Scanner A $850 S600 100 1 Scanner B $950 5600 Direct materials Direct labour Units completed No. of setups Inspection hours Machine hours Parts used 50 20 30 40 The company's normal activity is 20,000 direct labour hours. Each batch uses 50 hours of direct labour. Upon investigation, you discover that the Servicing Area employs one worker, who spends 80% of her time on the Servicing activity and 20% of her time on inspecting products. Her salary is $40,000. Inspecting Activity has taken into account the worker's salary but not the Servicing Activity. In addition, Servicing also uses a forklift, at a cost of $8.000 per year for amortization and fuel. The forklift is used only for Servicing activities. Required: Choose the best answer for each of the following multiple-choice questions based on the above information for Moonbeam. 14. The amount of cost assigned to the Servicing activity is A. $16,000 B. $36,000 C. $40,000 D. $46,000 E. $50,000 15. The activity rate for Servicing is A. $0.80 per part B. 50.72 per part C. $0.812 per part D. $0.32 per part E. S0.50 per part

please provide answeres to above question.

Answer 1

14)	Total salary of the worker			$ 40,000.00
	Time dedicated towards servicing			80%
	Cost allocated to servicing			$ 32,000.00
	Amortization and fuel cost			$    8,000.00
	Servicing cost (expected)			$ 40,000.00

15)	Servicing cost (expected)			$ 40,000.00
	Activity Capacity			50000
	Activity rate			$           0.80

16)	Setting up cost			$ 60,000.00
	Activity Capacity			300
	Activity rate			$      200.00

17)	Grinding cost			$ 90,000.00
	Activity Capacity			18000
	Activity rate			$           5.00

18)	Inspecting cost			$ 45,000.00
	Activity Capacity			4500
	Activity rate			$        10.00

19)	Setting up			$   60,000.00
	Inspecting			$   45,000.00
	Grinding			$   90,000.00
	Servicing			$   40,000.00
	Total expected cost			$ 235,000.00
	Normal direct labor hours			20000
	Predetermined OH rate			$           11.75
	Computation of units cost of scanner A
	Direct Material			$        850.00
	Direct Labor			$        600.00
	OH			$        587.50	($ 11.75 x 50 hours)
		Total cost		$     2,037.50
		No. of units		100
		Unit cost		$           20.38

20)	Allocation of OH using ABC
		Rates	Capacity used	Cost
	Setting up	$ 200.00	1	$    200.00
	Inspecting	$   10.00	4	$      40.00
	Grinding	$      5.00	20	$    100.00
	Servicing	$      0.80	20	$      16.00
			Total	$    356.00
	Computation of units cost of scanner A
	Direct Material			$    850.00
	Direct Labor			$    600.00
	OH			$    356.00
		Total cost		$ 1,806.00
		No. of units		100
		Unit cost		$      18.06