Hello I am working on the accounting assignment below I woul

Hello, I am working on the accounting assignment below. I would be very grateful for any help on solving this assignment below.

Activities

Cost Drivers

Total Cost

$33,495

26,235

23,400

$83,130

Cost Drivers

Instruments

Gauges

Total

Overhead Rate

Instruments

Gauges

Air United, Inc. manufactures two products: missile range instruments and space pressure gauges. During April, 52 range instruments and 303 pressure gauges were produced, and overhead costs of $83,130 were estimated. An analysis of estimated overhead costs reveals the following activities. Activities Cost Drivers Total Cost 1. Materials handling Number of requisitions $33,495 2. Machine setups Number of setups 26,235 3. Quality inspections Number of inspections 23,400 $83,130 The cost driver volume for each product was as follows. Cost Drivers Instruments Gauges Total Number of requisitions 380 635 1,015 Number of setups 180 315 495 Number of inspections 265 255 520

Solution

Step 1: Calculation of the Cost Driver Rate Cost Driver Rate = Activity Cost / Cost Driver Activity Cost Driver   Activity Cost / Cost Driver = \"/\"   Cost Driver \" = \" To Cost Driver Rate Material Handling No. of Requisition                             33,495 \"/\"                            1,015 \" = \" To                        33.00 Machine Setups No. of Set-ups                             26,235 \"/\"                               495 \" = \" To                        53.00 Quality inspection No. of inspections                             23,400 \"/\"                               520 \" = \" To                        45.00                             83,130 Step 2: Calculation of the Cost Driver Rate Per Unit Per Product Activity Product Cost Driver Used \"X \" By Cost Driver Rate   \" = \" To Activity Cost as per Service Department Material Handling No. of Requisition Instruments                                   380 \"X \" By $                           33 \" = \" To $                 12,540 Gauges                                   635 \"X \" By $                           33 \" = \" To $                 20,955 Machine Setups No. of Set-ups Instruments                                   180 \"X \" By $                           53 \" = \" To $                    9,540 Gauges                                   315 \"X \" By $                           53 \" = \" To $                 16,695 Quality inspection No. of inspections Instruments                                   265 \"X \" By $                           45 \" = \" To $                 11,925 Gauges                                   255 \"X \" By $                           45 \" = \" To $                 11,475 STEP 3 : - Calculation of the Revenue Divisional Income Statement For the year Ended June 30, 2014 Instruments Gauges Total Material Handling $                                12,540 $                         20,955 $             33,495 Machine Setups $                                  9,540 $                         16,695 $             26,235 Quality inspection $                                11,925 $                         11,475 $             23,400 Total Cost $                                34,005 $                         49,125 $             83,130 Divide By \"/\" By \"/\" By Number of Units 52 303 Overhead Cost per unit $                                653.94 $                         162.13 Answer = Instruments Gauges Total Cost = $                                34,005 $                         49,125 Overhead Cost per unit $                                653.94 $                         162.13