Question

Incorrect answer icon Your answer is incorrect. The total estimated manufacturing overhead of $264,000 was comprised of $168,000 for materials handling costs and $96,000 for purchasing activity costs. Under activity-based costing (ABC): (Round answers to 2 decimal places, e.g. 12.25.) What amount of materials handling costs are assigned to: (a) One mobile safe $enter a dollar amount per unit 336.00 each (b) One walk-in safe $enter a dollar amount per unit 120.00 each

Answer 1

Under activity-based costing (ABC), the amounts of materials handling costs assigned to the following units are:

(a) One mobile safe $210 per unit .

(b) One walk-in safe $168 per unit.

What is activity-based costing?

Activity-based costing is the costing method that assigns overhead and indirect costs to products and services based on consumption of activities.

Data and Calculations:

Materials handling costs = $168,000

Purchasing activity costs = $96,000

Total estimated manufacturing overhead = $264,000 ($168,000 + $96,000)

The following figures are assumed:

Activities:

Materials handling cost $168,000

Total hours of materials handling = 40,000 hours

Activity rate = $4.20 ($168,000/40,000) per hour

Purchasing activity cost = $96,000

Number of units purchased = 30,000

Activity rate = $3.20 ($96,000/30,000)

Consumption of activities:

                                    Material Handling hours     Number of Units used

Mobile safe per unit              50 hours                      3 units

Walk-in safe per unit            40 hours                       2 units

Overhead assigned:

                                    Material Handling

Mobile safe per unit    50 hours x $4.20 = $210

Walk-in safe per unit   40 hours x $4.20 = $168

Thus, under activity-based costing (ABC), the amounts of materials handling costs assigned to the following units are as indicated above.

Learn more activity-based costing at brainly.com/question/6654166