A company was evaluating the activity-based environmental cost of two different products: Product X and Product Y. Information on two environmental activities is as follows:
Activity Driver Cost
Maintaining pollution equipmentMaintenance hours$120,000
Toxic waste disposalKilograms of waste80,000
Data on Product X and Product Y follows:
Product X Product Y
Production costs (nonenvironmental)$400,000$500,000
Maintenance hours for pollution equipment1,0004,000
Pounds of toxic waste10,00030,000
A.Assign the environmental activity costs to Product X and to Product Y.
B.Calculate the unit environmental cost of Product X.
C.Calculate the unit environmental cost of Product Y.
D.Calculate the overall unit cost of Product X.
E.Calculate the overall unit cost of Product Y.
17.Browning Manufacturing Company uses activity-based costing. The overhead budget for the coming period is $1,053,000, consisting of the following:
Cost Pool Amount
The potential allocation bases and their estimated amounts were as follows:
Number of design changes35
Number of setups110
Direct labour hours10,000
A.Determine the overhead rate for each cost pool, using the most appropriate allocation base for each pool.
B.Job 80130 required $45,000 for direct materials, $20,000 for direct labour, 2,000 direct labour hours, 800 machine hours, five setups, and four design changes. Determine the cost of Job 80130.
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