Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four...

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Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Units produced Prime costs Machine hours Engineering hours Receiving orders Inspection hours Overhead costs: Machining Engineering Receiving Inspecting products Required: Regular 150,000 $13,200,000 150,000 400 200 800 $10,800,000 1,600,000 224,000 384,000 1. Calculate the four activity rates. Machining rate Deluxe 450,000 $48,600,000 750,000 3,600 600 1,600 14 X per machine hour Total $61,800,000 900,000 4,000 800 2,400 Engineering rate Receiving rate Inspecting rate 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Regular Deluxe 600 X per hour 350 X per order 160 per hour Regular Deluxe Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost 17.32 X per unit 30.37 X per unit 105.32 X per unit 130.37 X per unit Regular Deluxe 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Cost assignment 128,000 ✓ 256,000 Activity-Based Product Costing Davis Company produces two hair dryers: regular and deluxe. The company has four activities: machining, engineering, receiving, and inspection. Information on these activities and their drivers is given below. Units produced Prime costs Machine hours Engineering hours Receiving orders Inspection hours Overhead costs: Machining Engineering Receiving Inspecting products Required: Regular 150,000 $13,200,000 150,000 400 200 800 $10,800,000 1,600,000 224,000 384,000 1. Calculate the four activity rates. Machining rate Deluxe 450,000 $48,600,000 750,000 3,600 600 1,600 14 X per machine hour Total $61,800,000 900,000 4,000 800 2,400 Engineering rate Receiving rate Inspecting rate 2. Calculate the unit costs using activity rates. Round your answers to the nearest cent. Unit cost Regular Deluxe 600 X per hour 350 X per order 160 per hour Regular Deluxe Calculate the overhead cost per unit. Round your answers to the nearest cent. Overhead Cost 17.32 X per unit 30.37 X per unit 105.32 X per unit 130.37 X per unit Regular Deluxe 3. If consumption ratios instead of activity rates were used to assign costs instead of activity rates, show the cost assignment for the inspection activity. Cost assignment 128,000 ✓ 256,000

Answer rating: 100% (QA)

1 To calculate the activity rates we need to divide the total overhead costs for each activity by the total activity driver quantity Heres how you can calculate the four activity rates 1 Machining rat... View the full answer