Homework SourseLakeside Inc manufactures four lines of remote control boats
Lakeside Inc. manufactures four lines of remote control boats and uses activity-based costing to calculate product cost.
Suppose the Speedy boat requires 2,800 machine hours, 93 batches, and 300 inspections. Using the activity rates, determine the amount of overhead assigned to the Speedy product line. (Round intermediate calculations to 2 decimal places and your final answers to the nearest dollar amount.)
| Activity Cost Pools | Estimated Total Cost | Estimated Cost Driver | ||
| Machining | $ | 327,000 | 12,700 | machine hours |
| Setup | 64,000 | 380 | batches | |
| Quality control | 97,000 | 730 | inspections | |
Solution
activity rate per:
Machine hour=(327000/12700)=$25.75(approx)
batches=(64000/380)=$168.42(approx)
inspections=(97000/730)=$132.88(approx)
Hence total overhead assigned=(25.75*2800)+(168.42*93)+(132.88*300)
which is equal to
=$127627(approx).
