Home

Insert

Draw

Page Layout

Formulas

Data

Review

View

L$15$

$f_x$

A

B

C

D

E

F

G

$1$

Activity$-$Based Costing, Lean Operations, and the Costs of Quality

$2$

Compute activity rates and apply to jobs

$3$

Fuller Company uses ABC to account for its chrome wheel manufacturing process. Company managers have identified four manufacturing activities that incur manufacturing overhead costs: materials handling, machine setup, insertion of parts, and finishing. The budgeted activity costs

$4$

for the upcoming year and their allocation bases are as follows:

$5$

$\backslash$table$[[],[6],[7],[8],[9],[10],[11],[12]]$

Total Budgeted

Manufacturing Overhead

Activity

Cost

Allocation Base

Materials handling

$$12,000$

Number of parts

Machine setup

$3,400$

Number of setups

Insertion of parts

$48,000$ Number of parts

Finishing

Total

$80,000$ Finishing direct labor hours

Fuller Company expects to produce $1,000$ chrome wheels during the year. The wheels are

$13$

expected to use:

$14$

$\backslash$table$[[,$Parts,Setups,$\backslash$table$[[$Finishing$],[$Hours$],[$Consumed$]]],[,,10,2,000],[,,,],[$Job $420,$Parts Used,$\backslash$table$[[$Setups$],[$Required$]],\backslash$table$[[$Finishing$],[$Hours$],[$Consumed$]]],[$Job $510,200,2,130],[,425,4,350]]$

Use the blue shaded areas on the ENTERANSWERS tab for inputs.

Always use cell references and formulas where appropriate to receive full credit. If you $22$ copy$/$paste from the Instructions tab or if you type the numbers in$,$ you will be marked wrong.

$23$

$24$ Requirements

$251$ Compute the cost allocation rate for each activity.

$26$

$2$ Compute the manufacturing overhead cost that should be assigned to Job $420.$

$3$ Compute the manufacturing overhead cost that should be assigned to Job $510.$

INSTRUCTIONS

ENTERANSWERS