The Turtle Company has total estimated factory overhead for the year of $1,200,000,divided into four activities: fabrication,$600,000; assembly,$240,000; setup,$200,000; and materials handling,$160,000.Turtle manufactures two products,Boogie Boards and Surf Boards.The activity-base usage quantities for each product by each activity are as follows:

Each product is budgeted for 10,000 units of production for the year.Determine (a)the activity rates for each activity and (b)the factory overhead cost per unit for each product using activity-based costing.

Question

The Turtle Company has total estimated factory overhead for the year of $1,200,000,divided into four activities: fabrication,$600,000; assembly,$240,000; setup,$200,000; and materials handling,$160,000.Turtle manufactures two products,Boogie Boards and Surf Boards.The activity-base usage quantities for each product by each activity are as follows:
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  Each product is budgeted for 10,000 units of production for the year.Determine (a)the activity rates for each activity and (b)the factory overhead cost per unit for each product using activity-based costing.

Quizplus · Accepted Answer

The Answer of The Turtle Company has total estimated factory overhead for the year of $1,200,000,divided into four activities: fabrication,$600,000; assembly,$240,000; setup,$200,000; and materials handling,$160,000.Turtle manufactures two products,Boogie Boards and Surf Boards.The activity-base usage quantities for each product by each activity are as follows:
​
  Each product is budgeted for 10,000 units of production for the year.Determine (a)the activity rates for each activity and (b)the factory overhead cost per unit for each product using activity-based costing.

The Turtle Company Has Total Estimated Factory Overhead for the Year