Question not well presented:
Materials handling:$8700:Number of parts
Machine setup:$4650:Number of setups
Insertion:of parts:$49,300:number of parts
Finishing:$75,600:Finishing direct labor hours
Total:$138,259
West Horizon expects to produce 1,000 chrome wheels during the year. The wheels are expected to use 3,100 parts, require 25 setups, and consume 2,400 hours of finishing time. Job 420 used 100 parts, required 3 setups, and consumed 110 finishing hours. Job 510 used 450 parts, required 5 setups, and consumed 350 finishing hours
Answer:
For Machine Handling:. = $3 per part
For Machine Setup = $186 per Setup
For Insertion = $16 per part
For Finishing = $31.5 per hour
Explanation:
Cost allocation rate is calculated by:
Total activity overhead/(Total activity allocation base)
For Machine Handling:.
Total Activity Overhead = $8,700
Total Activity Allocation Base = 3,100
So, Cost Rate Allocation = $8,700/3,100
Cost Rate Allocation = 2.806451612903225
Cost Rate Allocation = $3 per part ----- Approximated to the nearest dollar
For Machine Setup
Total Activity Overhead = $4,650
Total Activity Allocation Base = 25
Cost Allocation Rate = $4,650/25
Cost Allocation Rate = $186 per Setup
For Insertion:
Total Activity Overhead = $49,300
Total Activity Allocation Base = 3,100
Cost Allocation Rate = $49,300/3,100
Cost Allocation Rate = $15.90322580645161
Cost Allocation Rate = $16 per part ------ Approximated to the nearest dollar
For Finishing:
Total Activity Overhead = $75,600
Total Activity Allocation Base = 2,400
Cost Allocation Rate = $75,600/2400
Cost Allocation Rate = $31.5 per hour
