Reassigning Costs to Cost Objectives Regal Products has developed the following

Question

Reassigning Costs to Cost Objectives Regal Products has developed the following activity cost information for its manufacturing activities: Activity Activity cost Machine setup $60.00 per batch Movement 15.00 per batch move 0.10 per pound Drilling 5.00 per hole Welding 2.00 per inch Shaping 25.00 per hour Assembly 19.00 per hour Inspection 2.00 per unit Filling an order for a batch of 50 fireplace inserts (each insert weighing 150 pounds) required the following: Three batch moves Two sets of inspections Drilling five holes in each unit Completing 50 inches of welds on each unit Thirty minutes of shaping for each unit One hour of assembly per unit Determine the activity cost of converting the raw materials into 50 fireplace inserts.

Explanation / Answer

60 movement 3 180 15 Move   3 45 0.1 per pound drilling 2 1 5 per hole welding 50 250 2 per inch shaping 30 60 25 per hour assembling 1 25 19 per hour inspection 2 38 2 per unit filling 2 4 Total cost 603

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