Acoma Co. has identified one of its cost pools to be quality control and has ass

Question

Acoma Co. has identified one of its cost pools to be quality control and has assigned $56,721 to that pool. Number of inspections has been chosen as the cost driver for this pool; Acoma performs 25,900 inspections annually. Suppose Acoma manufactures two products that consume 9,583 (Product 1) and 16,317 (Product 2) inspections each. Using activity rates, determine the amount of quality control cost to be assigned to each of Acoma's product lines. (Do not round intermediate calculation. Round your final answers to 2 decimal places. Quality Control Costs Product 1 Product 2

Explanation / Answer

Activity rate quality control = 56721/25900 = $2.19 per inspection

Quality control costs Product 1 (2.19*9583) $20986.77 Product 2 (2.19*16317) $35734.23

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