Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has een applied...

 

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Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has een applied on the basis of direct labor hours. Bayline, gathers some activity information and is interested in implementing an activity-based costing system. The company wants all overhead costs to be allocated to products. The overhead costs pools and activity drivers ae as follows: Activity Pool Machine setup Cutting/Assembly Total Drive Usage 1,00 setups Overhead costs $36,000 $62,000 $98,000 31,000 machine hours Total overhead costs Other product information is as follows: Longboard 42,000 Beginner Units produced 40,000 Direct material $10 per unit $25 per unit $10 per unit 8,000 Direct labor $8 per unit 6,000 Direct labor hours Machine setups 750 250 Machine hours 20,000 + 11,000 Required: a. Using the traditional method, determine the overhead rate per direct labor hour. b. Using the activity-based costing approach, determine the two activity rates. C. Using the activity-based approach, determine the unit product cost for the Beinner board. Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has een applied on the basis of direct labor hours. Bayline, gathers some activity information and is interested in implementing an activity-based costing system. The company wants all overhead costs to be allocated to products. The overhead costs pools and activity drivers ae as follows: Activity Pool Machine setup Cutting/Assembly Total Drive Usage 1,00 setups Overhead costs $36,000 $62,000 $98,000 31,000 machine hours Total overhead costs Other product information is as follows: Longboard 42,000 Beginner Units produced 40,000 Direct material $10 per unit $25 per unit $10 per unit 8,000 Direct labor $8 per unit 6,000 Direct labor hours Machine setups 750 250 Machine hours 20,000 + 11,000 Required: a. Using the traditional method, determine the overhead rate per direct labor hour. b. Using the activity-based costing approach, determine the two activity rates. C. Using the activity-based approach, determine the unit product cost for the Beinner board.

Answer rating: 100% (QA)

Required solution of all parts is given below Activity Cost Pool Overhead Costs Total Driver Us... View the full answer