h 17 HW Help Save 2 activities costs and activity drivers fo

h. 17 HW Help Save 2 activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic 50 Expected ivity Expected Activity Costs 900,000 105,000 175,000 300,000 75,000 Handling materials 625,000 100, 000 parts Inspecting product Processing purchase orders Paying suppliers 040957) 1,500 batches 700 orders 500 invoices 40,000 square Insuring the factory Designing packaging feet 2 models Print Assume that the following information is available for the company\'s two products for the first quarter of 2017 10,000 units 20,000 parts 30,000 units 30,000 parts Production volume Parts required Batches made Purchase orders Invoices Space occupied 250 batches 100 batches 50 orders 50 invoices 20 orders 10 invoices 10,000 sq. ft. 7,000 sq. ft 1 model 1 model ?Prev 2012 Next

Solution

Activity Rates: Handling Materials = $625,000 / 100,000 = $6.25/Unit Inspecting Product = $900,000/1,500 = $600/Batch Processing Purchase Order = $105,000/700 = $150/Order Paying Suppliers = $175,000/500 = $350/Invoice Insuring the Factory = $300,000 / 40,000 = $7.5/Square Feet Designing Packaging = $75,000/2 = $37,500/Model Activity Activity Rates Cost Driver Quantity - Deluxe OH Allocated Cost Driver Quantity - Basic OH Allocated Handling Materials $6.25 20,000 $125,000.00 30,000 $187,500.00 Inspecting Product $600.00 250 $150,000.00 100 $60,000.00 Processing Purchase Order $150.00 50 $7,500.00 20 $3,000.00 Paying Suppliers $350.00 50 $17,500.00 10 $3,500.00 Insuring the Factory $7.50 10,000 $75,000.00 7,000 $52,500.00 Designing Packaging $37,500.00 1 $37,500.00 1 $37,500.00 OH Allocated = Cost Driver Quantity x Activity Rates