A company produces numerous blends of coffee, two of which are known as the French Blend...

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A company produces numerous blends of coffee, two of which are known as the French Blend and the Italian Blend. The company's ABC system divides its total manufacturing overhead of $1,982,500 into four activity cost pools as shown below. Activity Measure Activity Purchasing Purchase orders Materials handling Number of setups Quality control Roasting Number of batches Roasting hours Expected Activity 1,500 orders Estimated Cost $ 330,000 1,800 setups $ 540,000 600 batches $ 210,000 95,000 hours $ 902,500 Data regarding production of the French and Italian blends is as follows: Expected sales Batch size Setups Purchase order size Roasting time per 100 pounds French Blend 100,000 pounds 10,000 pounds 3 per batch 20,000 pounds 0.5 hours Italian Blend 5,000 pounds 1,250 pounds 3 per batch 500 pounds 0.5 hours Assume the company uses activity-based costing. What is the activity rate for Materials Handling? A company produces numerous blends of coffee, two of which are known as the French Blend and the Italian Blend. The company's ABC system divides its total manufacturing overhead of $1,982,500 into four activity cost pools as shown below. Activity Measure Activity Purchasing Purchase orders Materials handling Number of setups Quality control Roasting Number of batches Roasting hours Expected Activity 1,500 orders Estimated Cost $ 330,000 1,800 setups $ 540,000 600 batches $ 210,000 95,000 hours $ 902,500 Data regarding production of the French and Italian blends is as follows: Expected sales Batch size Setups Purchase order size Roasting time per 100 pounds French Blend 100,000 pounds 10,000 pounds 3 per batch 20,000 pounds 0.5 hours Italian Blend 5,000 pounds 1,250 pounds 3 per batch 500 pounds 0.5 hours Assume the company uses activity-based costing. What is the activity rate for Materials Handling?

Answer rating: 100% (QA)

To calculate the activity rate for Materials Handling we first need to determine the total expected ... View the full answer