GERIAL-CH#1-4-SP18 ers the queestion Place your selection on the asuwer sheet. N
ID: 2541236 • Letter: G
Question
GERIAL-CH#1-4-SP18 ers the queestion Place your selection on the asuwer sheet. Nifty Company porduces three modesl of aluminum skateboards. The models have minor differences, but their processing operations and production costs are identical. During June the following costs were incurred Direct materials: Aluminum frame Bolts 162,524 3,876 Purchased parts Wheels Decals 74,934 Materials handling (assigned based on direct materials costs) Utilities Maintenance Depreciation 4,438 914 876 Assembly line (assigned based on labor hours) Labor 46,080 Setup (assigned based on number of setups) Labor Supplies Overhead 6,385 762 3,953 Product testing (assigned based on machine hours) Labor Supplies 2,765 435 Building occupancy (assigned based on machine hours) 5,767 2,452 3,781 Depreciation Repairs & maintenance For June output totaled 32,000 skateboards. Each board required 1.5 machine hours of effort. During June Nifty's assembly line worked 2,304 hours, performed 370 setups, and 64,000 product tests, and completed an order for 1,000 skateboards Required: Compute the following activity cost rates: a) materials handling cost rate b) assembly line cost rate, c) setup cost rate, d) product testing cost rate, and e) building occupancy cost rate.Explanation / Answer
Answer
No. of Skateboards
32000
machine hours required by each board
1.5 MH
Total Machine hours [32000 x 1.5]
48000 machine hours
Answers
Cost allocated
Drivers
No. of drivers for Skateboard
Activity rate
a)
Material handling
$6228
Material cost
$166400
0.037 per $ material cost
b)
Assembly Line
$46080
Labor hours
2304
$20 per DLH
c)
Setup
$11100
No. of setups
370
$30 per setup
d)
Product Testing
$3200
No. of tests
64000
$0.05 per test
e)
Building Occupancy
$12000
Machine hours
48000
$0.25 per MH
No. of Skateboards
32000
machine hours required by each board
1.5 MH
Total Machine hours [32000 x 1.5]
48000 machine hours
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