Caldwell Home Appliances Inc. is estimating the activity cost associated with producing ovens and refrigerators. The indirect labor can be traced into four separate activity pools, based on time records provided by the employees. The budgeted activity cost and activity-base information are provided as follows:

Activity	Activity Pool Cost			Activity Base
Procurement		$12,600		Number of purchase orders
Scheduling		90,000		Number of production orders
Materials handling		11,000		Number of moves
Product development		50,000		Number of engineering changes
Total cost		$163,600

The estimated activity-base usage and unit information for two product lines was determined from corporate records as follows:

		Number of Purchase Orders			Number of Production Orders			Number of Moves			Number of Engineering Changes			Units
Ovens			400			800			300			80			1,000
Refrigerators			300			400			200			120			500
	Totals		700			1,200			500			200			1,500

a. Determine the activity rate for each activity cost pool.

Procurement (per purchase order)	$
Scheduling (per production order)	$
Materials handling (per move)	$
Product development (per engineering change)	$

b. Determine the activity-based cost per unit of each product.

Ovens	$ per unit
Refrigerators	$ per unit

Answer rating: 100% (QA)

Question a A B AB Procurement 12600 700 18 Scheduling 90000 1200 75 Materials Handling 110... View the full answer