n Shoppi G Gmai New tab P4 American Count Ch 17 Homework 2 https//newconnect.mhe

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n Shoppi G Gmai New tab P4 American Count Ch 17 Homework 2 https//newconnect.mheducation.com/flow/connect html Exercise 17-3 Assigning costs using ABC LO P3 Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts Deluxe and Basic Expected Expected Ac Activity Costs Handling materials Inspecting product Processing purchase orders Paying suppliers Insuring the factory Designing packaging $625,000 10,008 parts 900,006 185,009 175,000 300,000 75,888 1,500 batches 700 orders 500 invoices 40,000 square feet 2 models Assume thet the following information is available for the company's two products for the first quarter of 2017 Deluxe Model Basic Model 1e,000 units 3e,000 units 28,e00 parts 38,000 parts Production volume Parts required Batches made Purchase orders Invoices Space occupied Models 258 batches 100 batches se orders se invoices 20 orders 1e invoices 10,000 sq. ft. 7,000 sq. ft 1 model 1 nodel Required: Compute activity rates for each activity and assign overhead costs to the overhead cost per unt of each model? (Round activity rate answers to 2 decimal places.) each product model using activity-based costing (ABC) What is

Explanation / Answer

STATEMENT SHOWING ACTIVITY RATE OF ACTIVITY POOL Activity Total Expected Activity ACTIVITY COST POOL Measures Overheads Activity Rate Handling metrial Parts 625000 100000 6.25 Inspecting product Batches 900,000 1,500 600 Processing purchasse orders Orders 105,000 700 150 Paying supplies Invoices 175,000 500 350 Insuring the factory Sq. feet 300,000 40,000 7.5 Designing packaging models 75,000 2 37500 DELUXE: Activity rate Cost driver OH allocated Handling metrial 6.25 20,000 125000 Inspecting product 600 250 150000 Processing purchasse orders 150 50 7500 Paying supplies 350 50 17500 Insuring the factory 7.5 10,000 75000 Designing packaging 37500 1 37500 Total OH 412,500 Divided: Number of unist 10,000 OH cost per unit 41.25 BASIC: Activity rate Cost driver OH allocated Handling metrial 6.25 30,000 187500 Inspecting product 600 100 60000 Processing purchasse orders 150 20 3000 Paying supplies 350 10 3500 Insuring the factory 7.5 7,000 52500 Designing packaging 37500 1 37500 Total OH 344,000 Divided: Number of unist 30,000 OH cost per unit 11.467

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