Activity-Based Costing: Factory Overhead Costs The total factory overhead for Ba

Question

Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,523,900, divided into four activities: fabrication, $756,000; assembly $266,000; setup, $270,900; and inspection, $231,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection 10,500 dlh 31,500 42,000 dlh 76 setups 554 630 setups Speedboat 28,500 dlh 131 inspections Bass boat 9,500 919 38,000 dlh 1050 inspections Each product is budgeted for 5,500 units of production for the year. a. Determine the activity rates for each activity Fabrication Assembly Setup Inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar Speedboat Bass boat per direct labor hour per direct labor hour per setup per inspection per unit per unit

Explanation / Answer

Solution a:

Solution b:

Activities Overhead amount Activity Base Total usage Activity Rate (Overhead amount/ Total usage) Fabrication $756,000.00 Direct Labor Hours 42000 $18.00 Assembly $266,000.00 Direct Labor Hours 38000 $7.00 Setup $270,900.00 setups 630 $430.00 Inspection $231,000.00 inspections 1050 $220.00 Total $1,523,900.00

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