Product costing in an activity-based costing system [20-30 min] Elton Company manufactures wheel rims. The controller...

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Product costing in an activity-based costing system [20-30 min] Elton Company manufactures wheel rims. The controller budgeted the following ABC allocation rates for 2012: Activity Materials handling Machine setup Insertion of parts Finishing Allocation Base Number of parts Number of setups Number of parts Finishing hours Cost Allocation Rate 4.00 per part 500.00 per setup 23.00 per part 50.00 per hour The number of parts is now a feasible allocation base because Elton recently pur- chased bar coding technology. Elton produces two wheel rim models: standard and deluxe. Budgeted data for 2012 are as follows: Standard 6.0 17.0 5.0 6.0 Deluxe 9.0 17.0 6.5 7.0 Parts per rim Setups per 500 rims Finishing hours per rim Total direct labor hours per rim The company expects to produce 500 units of each model during the year. Product costing in an activity-based costing system [20-30 min] Elton Company manufactures wheel rims. The controller budgeted the following ABC allocation rates for 2012: Activity Materials handling Machine setup Insertion of parts Finishing Allocation Base Number of parts Number of setups Number of parts Finishing hours Cost Allocation Rate 4.00 per part 500.00 per setup 23.00 per part 50.00 per hour The number of parts is now a feasible allocation base because Elton recently pur- chased bar coding technology. Elton produces two wheel rim models: standard and deluxe. Budgeted data for 2012 are as follows: Standard 6.0 17.0 5.0 6.0 Deluxe 9.0 17.0 6.5 7.0 Parts per rim Setups per 500 rims Finishing hours per rim Total direct labor hours per rim The company expects to produce 500 units of each model during the year.

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