McNish Enterprise manufactures and sells two products, Standard and Premium. The company uses the activity-based costing...

Transcribed Image Text:

McNish Enterprise manufactures and sells two products, Standard and Premium. The company uses the activity-based costing system to allocate its overhead costs. The following information has been collected relating to the SIX (6) overhead activities: Activity Cost Purchase Orders Quality Control Material Handling Setup Cost Production Scheduling Procurement $1 240 500 The activity-based usage quantities for each product are as follows: Number of Orders Number of Orders Executed Standard Premium Setups 300 $400 500 $275 000 $150 000 $50 000 $125 000 $240 000 200 900 1600 750 2 500 1250 Number of Inspection 500 500 Total 500 2 000 The company produces 2 500 units of Standard and 2 000 units of Premium Required: 1000 (i) Calculate the activity rate for each activity. (ii) Calculate the total overhead cost assigned to each product based on rates calculated in part (i). (iii) Calculate the unit cost for each product. Number of Production Use 450 350 800 McNish Enterprise manufactures and sells two products, Standard and Premium. The company uses the activity-based costing system to allocate its overhead costs. The following information has been collected relating to the SIX (6) overhead activities: Activity Cost Purchase Orders Quality Control Material Handling Setup Cost Production Scheduling Procurement $1 240 500 The activity-based usage quantities for each product are as follows: Number of Orders Number of Orders Executed Standard Premium Setups 300 $400 500 $275 000 $150 000 $50 000 $125 000 $240 000 200 900 1600 750 2 500 1250 Number of Inspection 500 500 Total 500 2 000 The company produces 2 500 units of Standard and 2 000 units of Premium Required: 1000 (i) Calculate the activity rate for each activity. (ii) Calculate the total overhead cost assigned to each product based on rates calculated in part (i). (iii) Calculate the unit cost for each product. Number of Production Use 450 350 800

Answer rating: 100% (QA)

i Calculating the activity rate for each activity Activity Rate Total Cost Activitybased Usage Quant... View the full answer