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$435,000$ and $$735,000$ for the cutting and Finishing departments, respectively. Round per unit amounts to the nearest whole cent.

Department

Production Department Rate

Cutting Department

per direct labor hour

Finishing Department

$

per direct labor hour

Determine the total and per$-$unit factory overhead costs allocated to each product, using the multiple production department overhead rates in $(3).$ Round per unit amounts to the nearest whole cent.

Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent.

Activity

Production Control

Materials Handling

Cutting Department

Finishing Department

Activity Rate

per prod. run

$

per move

per dlh

per dlh

Determine the total and per$-$unit cost assigned to each product under activity$-$based costing. Round the per unit amounts to the nearest whole cent.

activity$-$based costing.

The plantwide overhead method allocates $

of overhead to each product, while the multiple production department method allocates $

overhead to snowboards and

to skis.

Both the plantwide and multiple production department methods

distort the allocation of overhead because they

iccount for how each product consumes overhead. In

contrast, activity$-$based costing allocates $

of factory overhead to snowboards and

to skis. Activity$-$based costing

accurately allocates factory overhead because

for how each product consumes overhead. Snowboards consume.

direct labor hours in the Finishing Department, which has

overhead. In additior

snowboards consume.

production control and materials handling overhead than do skis. This is because snowboards are made in

lots, representing a

activity costs than skis.

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