Question

all number 3

Check my work Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures two types of go-karts: Deluxe and Basic. 0.85 points Activity Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging Expected Costs $625,000 900,000 105,000 175,000 300,000 75,000 Expected Activity 100,000 parts 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models (8 02:00:43 eBook Assume that the following information is available for the company's two products for the first quarter of this year. Print References Production volume Parts required Batches made Purchase orders Invoices Space occupied Models Deluxe Model 10,000 units 20,000 parts 250 batches 50 orders 50 invoices 10,000 sq. ft. 1 model Basic Model 30,000 units 30,000 parts 100 batches 20 orders 10 invoices 7,000 sq. ft 1 model Required: Compute activity rates for each activity and assign overhead costs to each product model using activity-based costing (ABC). What is the overhead cost per unit of each model? (Round activity rate and average OH cost per unit answers to 2 decimal places.) Deluxe Activity Handling materials Activity Rate Cost driver quantity incurred OH Allocated Screenshot

Answer 1

Computation of Overhead Rate
Activities	Costs	Cost drivers	Cost driver total	Overhead rate(Costs/Cost driver total)
Handling materials	$6,25,000	Parts	1,00,000	$6.25	per part
Inspecting product	$9,00,000	Batches	1,500	$600.00	per batch
Processing purchase orders	$1,05,000	Orders	700	$150.00	per order
Paying suppliers	$1,75,000	invoices	500	$350.00	per invoice
Insuring the factory	$3,00,000	Square feet	40,000	$7.50	per sq. feet
Designing packaging	$75,000	models	2	$37,500.00	per model
		Deluxe		Basic
	Overhead Rate	Cost driver quantity allocated	OH allocated	Cost driver quantity allocated	OH allocated
Handling materials	$6.25	20,000	$1,25,000	30,000	$1,87,500
Inspecting product	$600.00	250	$1,50,000	100	$60,000
Processing purchase orders	$150.00	50	$7,500	20	$3,000
Paying suppliers	$350.00	50	$17,500	10	$3,500
Insuring the factory	$7.50	10,000	$75,000	7,000	$52,500
Designing packaging	$37,500.00	1	$37,500	1	$37,500