Instructions Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and...
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Accounting
Instructions Mello Manufacturing Company is a diversified manufacturer that manufactures three products (Alpha, Beta, and Omega) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Activity Cost Pool 2 Production $237,552.00 3 Setup 93,660.00 * Material handling Inspection 10,500.00 53,185.00 156,755.00 Product engineering Total $551,652.00 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Material handling Number of parts Inspection Number of inspection hours Product engineering Number of engineering hours The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Number of Number of Number of Number of Hours Setups Parts Inspection Hours Engineering Hours Units Alpha 1,000 62 82 458 133 1,137 1,057 Beta 733 121 147 270 187 Alpha 1,000 62 82 458 133 1,137 Beta 733 121 147 270 1871,057 Omega 388 237 271 239 215 474 Total 2,121 420 500 967 535 2,668 och product requires 40 minutes per unit of machine time. Required: Complete the Activity Tables for Alpha, Beta and Omega 1. Determine the activity rate for each activity.* 2. Use the activity rates in (1) to determine the total and per-unit activity costs associated with all three products." 3. Why aren't the activity unit costs equal across all three products since they require the same machine time per unit? *If required, round all per-unit amounts to the nearest cent Activity Table - Alpha Hipna Activity Activity Base Activity Activity Usage Rate Cost Production mh Imh Setup setups setup Material handling parts part Inspection Insp. hours hour Product Engineering eng, hours hour Total activity cost Number of units Activity cost per unit




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