AirBo Manufacturing uses activity$-$based costing for its jet engine process. AirBo separates their manufacturing overhead into three activities: materials handling, assembly and inspection. The following is the budgeted cost for each manufacturing activity and their cost allocation bases:

Materials Handling Assembly Inspection

Total Budgeted Cost $$944,000$ $$355,500$ $$316,750$

Cost Allocation Base Amount of parts Number of direct labor hours Number of inspections

These jet engines are expected to consume $8,000$ parts, require $4,500$ direct labor hours and $175$ inspections. Suppose AirBo builds two types of engines $($Engine A and Engine B$).$ During the month, engine A consumed $1,500$ parts, required $1,500$ direct labor hours and required $100$ inspections. Engine B consumed $4,500$ parts, required $3,000$ direct labor hours and required $65$ inspections. During the month, the company manufactured $15$ type A engines and $17$ type B engines.

 

 Reqiured:

a$)$ For each manufacturing activity, calculate the activity rate.

Do not enter dollar signs or commas in the input boxes.

Round your answers in part a$)$ to $2$ decimal places.

Materials handling: $Answer

per part

Assembly: $Answer

per hour

Inspection: $Answer

per inspection

b$)$ Determine the manufacturing overhead unit cost for each type of engine.

Round your answers in part b$)$ to the nearest whole number.

Engine A: $Answer

Engine A unit cost: $Answer

Engine B:

Engine B unit cost:

Answer rating: 100% (QA)

Answer AirBo Manufacturing Activity Based Costing a Activity Rates To calculate the activity rate fo... View the full answer