Activity Rates and Activity-Based Product Costing Hammer Company produces a variety of electronic equipment. One of its...

80.2K

Verified Solution

Question

Accounting

Activity Rates and Activity-Based Product Costing
Hammer Company produces a variety of electronic equipment. Oneof its plants produces two laser printers: the deluxe and theregular. At the beginning of the year, the following data wereprepared for this plant:
Deluxe Regular
Quantity 100,000 800,000
Selling price $900 $750
Unit prime cost $529 $483
In addition, the following information was provided so thatoverhead costs could be assigned to each product:
Activity Name Activity Driver Deluxe Regular Activity Cost
Setups Number of setups 300 200 $2,050,000
Machining Machine hours 100,000 300,000 40,000,000
Engineering Engineering hours 50,000 100,000 15,000,000
Packing Packing orders 100,000 400,000 250,000
Required:
1. Calculate the overhead rates for eachactivity. If required, carry your answers out to the nearestcent.
Setups $ per setup
Machining $ per machine hour
Engineering $ per engineering hour
Packing $ per packing order
2. Calculate the per-unit product cost for eachproduct. Round your answers to the nearest whole dollar.
Deluxe $per unit
Regular $per unit

Answer & Explanation Solved by verified expert

3.6 Ratings (391 Votes)

Setups 4100 per setup Machining 100 per machine hour Engineering 100 per engineering hour Packing 050 per packing order Working Calculation of Activity rates Activity Cost Pool Activity driver Overhead Cost Expected Activity B Activity rate AB Setups See Answer

Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:

Unlimited Question Access with detailed Answers
Zin AI - 3 Million Words
10 Dall-E 3 Images
20 Plot Generations
Conversation with Dialogue Memory
No Ads, Ever!
Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!

Become a Member

	Deluxe	Regular
Quantity	100,000	800,000
Selling price	$900	$750
Unit prime cost	$529	$483

Activity Name	Activity Driver	Deluxe	Regular	Activity Cost
Setups	Number of setups	300	200	$2,050,000
Machining	Machine hours	100,000	300,000	40,000,000
Engineering	Engineering hours	50,000	100,000	15,000,000
Packing	Packing orders	100,000	400,000	250,000

Setups	$ per setup
Machining	$ per machine hour
Engineering	$ per engineering hour
Packing	$ per packing order