most round each intermediate answers by two decimals EyeGuard Equipment Inc. (EE

Question

most round each intermediate answers by two decimals

EyeGuard Equipment Inc. (EEI) manufactures protective eyewear for use in commercial and home applications. The product is also used by hunters, home woodworking hobbyists, and in other applications. The firm has two main product lines-the highest-quality product is called Safe-T, and a low-cost, value version is called Safe-V. Information on the factory conversion costs for EEl is as follows Factory Costs Salaries Supplies Factory expense $ 848,000 148,000 548,000 $1,544,000 EEl uses ABC to determine the unit costs of its products. The firm uses resource consumption cost drivers based on rough estimates of the amount that each activity consumes, as shown below. EEl has four activities: job setup, assembly, inspecting and finishing, and packaging Inspecting and Finishing 25% 30 30 Setup Assembly Packaging Total Salaries Supplies Factory expense 10% 15 100% 100 100 50% 15% 70 The activity cost drivers for the two products are summarized below. Activities Setup Assembly Inspect and finishing Packaging Activity Driver Batch Units Finishing hours Packing hours Batches Units Finishing hours, per unit Packaging hours, per unit Materials per unit Safe-v 230 58,000 0.40 0.30 3.00 Safe-T 580 70,000 0.40 0.20

Explanation / Answer

Determine the amount of the cost pool for each four activities :

Calculate activities rate :

3) Calculate activity based unit cost :

Factory costs Setup Assembly Inspecting and finishing Packaging Salaries 848000 84800 424000 212000 127200 Supplies 148000 22200 81400 44400 0 Factory expense 548000 383600 164400 Total 1544000 107000 889000 420800 127200

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