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Activity Cost Rates Meanwhile Company produces three models of aluminum skateboards. The models have minor differences but their processing operations and production costs are identical. During June

Activity Cost Rates

Meanwhile Company produces three models of aluminum skateboards. The models have minor differences, but their processing operations and production costs are identical. During June, these costs were incurred:

Direct materials

Aluminum frame

$162,524

Bolts

3,876

Purchased parts

 

Wheels

74,934

Decals

5,066

 

Materials handling (assigned based on direct materials cost)

Labor

17,068

Utilities

4,438

Maintenance

914

Depreciation

876

 

Assembly line (assigned based on labor hours)

Labor

Labor

 

Setup (assigned based on number of setups)

Labor

6,385

Supplies

762

Overhead

3,953

 

Product testing (assigned based on number of tests)

Labor

2,765

Supplies

435

 

Building occupancy (assigned based on machine hours)

Insurance

5,767

Depreciation

2,452

Repairs and maintenance

3,781

For June, output totaled 32,000 skateboards. Each board required 1.5 machine hours of effort. During June, Mean while’s assembly line worked 2,304 hours, performed 370 setups and 64,000 product tests, and completed an order for 1,000 skateboards placed by Whatever Toys Company. The job incurred costs of $5,200 for direct materials and $2,500 for purchased parts. It required 3 setups, 2,000 tests, and 72 assembly line hours.

Required

1. Compute the following activity cost rates:

a. Materials handling cost rate

b. Assembly line cost rate

c. Setup cost rate

d. Product testing cost rate

e. Building occupancy cost rate

2. Prepare a bill of activities for the Whatever Toys job.

3. Use activity-based costing to compute the job’s total cost and product unit cost. (Round your answer to two decimal places.)

Jun 19 2020 View more View Less

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