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3 years ago

Activity Budgeted Activity Cost

Business

1 answer:

vampirchik [111]3 years ago

3 0

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

Working

White Brown Powdered Total

Sugar Sugar Sugar

Machine Hours 5000 2500 2500 10,000

Production *50 *50 *50

$ 250,000 $ 125,000 $ 125,000

Number of setups 85 170 195 450

Setup * 320 * 320 * 320

27,200 54,400 62,400

Number of inspections 220 330 550 1100

Inspection *40 *40 *40

8800 13200 22000

Number of customer 1150 2600 2000 5750

Orders

Shipping *20 *20 *20

23,000 52000 40,000

Number of customer 60 350 190 600

Service Requests

Customer service *140 *140 *140

8400 49000 26,600

Units 10,000 5000 5000 20,000

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Manufacturing overhead cost for march:

Schedule of cost goods manufactured

Beginning balance in works in process

35000

Plus current manufacturing costs:

Direct material (5600 units x $8)44,800

Direct labor ( 5600 * $10)56,000

Manufacturing overhead (288200-44800-56000)

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Schedule of cost goods manufactured

Beginning balance in works in process

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2. High-low method: The cost equation such as variable cost and the fixed cost can be calculated using the high-low method as follows;

Variable cost per unit = (Highest cost - lowest cost) /( highest level of activity - lowest level of activity)

Variable cost per unit =( 210400 - 187400) / (10200 - 5600 )= 23000 / 4600

Variable cost per unit = $5

Total variable cost at lowest activity = 5 * 5600

Total variable cost= 28000

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Formula

Total overhead cost = 159400 + ( 5 * number of units produced)

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