Question: Question number 2 needs to be answered. Activity-Based Product Costing Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a

Question number 2 needs to be answered.Activity-Based Product Costing Sweet Sugar Company manufactures three products (white sugar, brown sugar, and powdered sugar) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Budgeted Activity Cost Production $481,800 Setup 298,200 Inspection 119,000 Shipping 99,900 Customer service 56,000 Total $1,054,900 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Inspection Number of inspections Shipping Number of customer orders Customer service Number of customer service requests The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: tmp eBook Customer Number of Number of Number of Service Setups Machine Hours Customer Orders Inspections Requests Units White sugar 3,210 180 280 740 50 8,025 Brown sugar 2,040 270 420 2,040 320 5,100 Powdered sugar 2,050 250 700 920 130 5,125 Total 7,300 700 1,400 3,700 500 18,250 Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
