Alligood Company produces three models of aluminum skateboards. The models have minor differences, but their processing operations

Question:

Alligood Company produces three models of aluminum skateboards. The models have minor differences, but their processing operations and production costs are identical. During June, these costs were incurred:

Direct materials

Aluminum frame........................................... $162,524

Bolts.............................................................. 3,876

Purchased parts

Wheels.......................................................... 74,934

Decals............................................................ 5,066

Materials handling (assigned based on direct materials cost)

Labor.......................................................... $17,068

Utilities........................................................... 4,438

Maintenance....................................................... 914

Depreciation....................................................... 876

Assembly line (assigned based on labor hours)

Labor............................................................ 46,080

Setup (assigned based on number of setups)

Labor............................................................. 6,385

Supplies............................................................ 762

Overhead......................................................... 3,953

Product testing (assigned based on number of tests)

Labor............................................................. 2,765

Supplies............................................................ 435

Building occupancy (assigned based on machine hours)

Insurance........................................................ 5,767

Depreciation.................................................... 2,452

Repairs and maintenance...................................... 3,781

For June, output totaled 32,000 skateboards. Each board required 1.5 machine hours of effort. During June, Alligood's assembly line worked 2,304 hours, performed 370 setups and 64,000 product tests, and completed an order for 1,000 skateboards placed by Executive Toys Company. The job incurred costs of $5,200 for direct materials and $2,500 for purchased parts. It required 3 setups, 2,000 tests, and 72 assembly line hours.

Required

1. 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

e. Building occupancy cost rate

2. Prepare a bill of activities for the Executive Toys job.

3. Use activity-based costing to compute the job's total cost and product unit cost. (Round your answer to two decimal places.)

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Related Book For  book-img-for-question

Principles of Accounting

ISBN: 978-0618736614

10th edition

Authors: Belverd Needles, Marian Powers, Susan Crosson

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