Answer:
Activity Rate = Activity Cost/ Driver Costs= $ 500,000/10,000= 50
Activity Budgeted Budgeted Budgeted
Activity Cost Cost Driver Activity Rate
Production $500,000 10,000 50
Setup $144,000 450 320
Inspection $44,000 1100 40
Shipping $115,000 5750 20
Customer service $84,000 600 140
Total $887,000
White Brown Powdered Total
Sugar Sugar Sugar
Units 10,000 5000 5000 20,000
Production 250,000 125,000 125,000 500,000
Setup $ 27200 54,400 62400 144,000
Inspection $ 8800 13200 22000 44000
Shipping $ 23000 52,000 40,000 115000
Customer service $ 8400 49,000 26,600 $ 84,000
Total $ 317,400 $ 293,600 $276,000 $887,000
Per Unit Cost $ 31.74 $58.72 $ 55
<u>Working </u>
White Brown Powdered Total
Sugar Sugar Sugar
Machine Hours 5000 2500 2500 10,000
<u>Production *50 *50 *50</u>
<u> $ 250,000 $ 125,000 $ 125,000</u>
Number of setups 85 170 195 450
<u>Setup * 320 * 320 * 320</u>
<u> 27,200 54,400 62,400</u>
Number of inspections 220 330 550 1100
<u>Inspection *40 *40 *40</u>
<u> 8800 13200 22000</u>
Number of customer 1150 2600 2000 5750
Orders
<u>Shipping *20 *20 *20</u>
<u> 23,000 52000 40,000 </u>
Number of customer 60 350 190 600
Service Requests
<u>Customer service *140 *140 *140</u>
<u> 8400 49000 26,600</u>
Units 10,000 5000 5000 20,000
