Activity-Based, Costing Hercules Industries manufactures two types of electrical power units,
custom and standard, which involve four overhead activities-production setup, procurement,
quality control, and materials management. An activity analysis of the overhead revealed the
following estimated costs and activity bases for these activities: The activity-base usage
quantities for each product are as follows: Determine an activity rate for each activity. Assign
activity costs to each product, and determine the unit activity cost using the activity rates from
part (a). Round unit costs to the nearest cent. Assume that each product required one direct labor
hour per unit. Determine the per unit cost if factory overhead is allocated on the basis of direct
labor hours. Round your answer to the nearest cent. Explain why the answers in parts (b) and (c)
are different. The input in the box below will not be graded, but may be reviewed and
considered by your instructor.
Solution
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custom and standard, which involve four overhead activities-production setup, procurement,
quality control, and materials management. An activity analysis of the overhead revealed the
following estimated costs and activity bases for these activities: The activity-base usage
quantities for each product are as follows: Determine an activity rate for each activity. Assign
activity costs to each product, and determine the unit activity cost using the activity rates from
part (a). Round unit costs to the nearest cent. Assume that each product required one direct labor
hour per unit. Determine the per unit cost if factory overhead is allocated on the basis of direct
labor hours. Round your answer to the nearest cent. Explain why the answers in parts (b) and (c)
are different. The input in the box below will not be graded, but may be reviewed and
considered by your instructor.
Solution
Posters rating is not 100%. Hence Pl dont answer this post as this person has been
irresponsible in rating answers. So he don\'t deserve any solutions here. First make him rate all
pending posts truthfully & also pledge that he will rate all answers within 2 days to be eligible
for help from Educators & others. Till such time, just ignore all posts where rating is not 100%.
This will make Cramster a better forum to contribute. Amen... Pl goto
http://www.cramster.com/my_cramster/questions-and-answers/NeedRatingQuestions & rate
your pending posts
