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Activity Cost Rates Noir Company produces four versions of its model J17 21 bicycle seat. The four versions have different shapes but their processing operations and production costs are identical

Activity Cost Rates

Noir Company produces four versions of its model J17-21 bicycle seat. The four versions have different shapes, but their processing operations and production costs are identical. During July, these costs were incurred:

Direct materials

Leather

$25,430

Metal frame

39,180

Bolts

3,010

Materials handling

 

Labor

8,232

Equipment depreciation

4,410

Electrical power

2,460

Maintenance

5,184

Assembly

 

Direct labor

Engineering design

4,116

Labor

1,176

Electrical power

7,644

Engineering overhead

 

Overhead

 

Equipment depreciation

7,056

Indirect labor

30,870

Supervision

17,640

Operating supplies

4,410

Electrical power

10,584

Repairs and maintenance

21,168

Building occupancy overhead

52,920

July’s output totaled 29,400 units. Each unit requires three machine hours of effort. Materials handling costs are allocated to the products based on direct materials cost, engineering design costs are allocated based on units produced, and overhead is allocated based on machine hours. Assembly costs are allocated based on direct labor hours, which are estimated at 882 for July.

During July, Noir Company completed 520 bicycle seats for Job 142. The activity usage for Job 142 was as follows: direct materials, $1,150; direct labor hours, 15.

Required

1.Compute the following activity cost rates: (a) materials handling cost rate; (b) assembly cost rate, (c) engineering design cost rate, and (d) overhead rate.

2. Prepare a bill of activities for Job 142.

3. Use activity-based costing to compute the job’s total cost and product unit cost.

Jun 19 2020 View more View Less

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