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:  
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