Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras
ID: 2443612 • Letter: R
Question
Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:Product Machine Hours Setups Receiving Orders Packing Orders
35mm 10,000 100 200 400
Digital 10,000 250 800 2000
Cost $60,000 $40,000 $8,000 $24,000
A. Calculate the total overhead assigned to each the 35mm camera using only machine hours to calculate a plant-wide rate.
B. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.
C. Calculate an activity rate for packing based on packing orders.
Please provide steps to each solution.
Explanation / Answer
A. Calculate the total overhead assigned to each the 35mm camera using only machine hours to calculate a plant-wide rate.
______________________________________________________
Machining $60,000
Setups $40,000
Receiving Orders $8,000
Packing Orders $24,000
Total Overhead Costs $132,000
Total Machine hours 20,000
Plantwide Machine Hour Rate $6.60
Costs assigned to 35mm 10,000 x $6.60 = $66,000
______________________________________________________
B. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.
Activity Costs Base Rate
Receiving Orders $8,000 1,000 $8.00
Receiving costs assigned to 35mm 200 x $8.00 = $1,600
C. Calculate an activity rate for packing based on packing orders.
Activity Costs Base Rate
Packing Orders $24,000 2,400 $10.00
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.