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Learning Objective 4 Exercise 26 11 Contemporary Lighting Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows:
Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity base usage quantities and units produced are provided in the table below.
ACTIVITY BASE ENTRY DINING TOTAL MACHINE HOURS 2600 1200 3800 DIRECT LABOR HOURS 1000 2300 3300 NUMBER OF INSPECTIONS 900 320 1220 NUMBER OF SETUPS 180 60 240 NUMBER OF LOADS 600 250 850 UNITS PRODUCED 7500 3000 10500 a. Determine the activity rate for each activity. |
Activity Activity Rate Casting $ per machine hour Assembly $ per direct labor hour Inspecting $ per inspection Setup $ per setup Materials handling $ per load
b. Use the activity rates in (a) to determine the total and per unit activity costs associated with each product. Round the per unit rates to the nearest cent.
Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures $ $ Dining Room Lighting Fixtures $ $
ACTIVITY BUDGETED ACTIVITY COST ACTIVITY BASE
CASTING 106400 MACHINE HOURS
ASSEMBLY 2800 DIRECT LABOR HOURS
INSPECTING 17080 NUMBER OF INSPECTIONS
SETUP 33600 NUMBER OF SETUPS
MATERIALS HANDLING 35700 NUMBER OF LOADSShow All Feedback
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