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22 July, 17:30

Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,066,500, divided into four activities: fabrication, $522,000; assembly, $182,000; setup, $195,750; and inspection, $166,750. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 7,250 dlh 19,500 dlh 52 setups 91 inspections Bass boat 21,750 6,500 383 634 29,000 dlh 26,000 dlh 435 setups 725 inspections Each product is budgeted for 2,500 units of production for the year. a. Determine the activity rates for each activity. Fabrication $ per direct labor hour Assembly $ per direct labor hour Setup $ per setup Inspection $ per inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar. Speedboat $ per unit Bass boat $ per unit

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  1. 22 July, 18:04
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    a. Activity rates for each activity

    Fabrications = $18/dlh

    Assembly = $7/dlh

    Setup = $450/setup

    Inspection = $230/inspection

    b. Activity-based factory overhead per unit for each product

    Speed Boats = $124.532

    Bass boats = $302.068

    Explanation:

    Provided there are various activities as follows

    Activity Cost Speed Boats Bass boats Total activity

    Fabrications $522,000 7,250 dlh 21,750 dlh 29,000 dlh

    Assembly $182,000 19,500 dlh 6,500 dlh 26,000 dlh

    Setup $195,750 52 setups 383 setups 435 setups

    Inspection $166,750 91 inspections 634 inspections 725 inspt.

    a. Activity rates for each activity

    Fabrications = $522,000/29,000 dlh = $18/dlh

    Assembly = $182,000/26,000 dlh = $7/dlh

    Setup = $195,750/435 setups = $450/setup

    Inspection = $166,750/725 inspections = $230/inspection

    b. Activity-based factory overhead per unit for each product

    Activity Speed Boats Bass boats

    Fabrications 7,250 x $18 = $130,500 21,750 X $ 18 = $391,500

    Assembly 19,500 X $7 = $136,500 6,500 X $7 = $45,500

    Setup 52 X $450 = $23,400 383 X $450 = $172,350

    Inspection 91 X $230 = $20,930 634 X $230 = $145,820

    Total of both = $311,330 = $755,170

    Total units are 2,500 of each product

    Cost p. u. = $311,330/2,500 = $124.532 = $755,170/2,500 = $302.068

    a. Activity rates for each activity

    Fabrications = $18/dlh

    Assembly = $7/dlh

    Setup = $450/setup

    Inspection = $230/inspection

    b. Activity-based factory overhead per unit for each product

    Speed Boats = $124.532

    Bass boats = $302.068
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