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Compute the activity cost rates for materials handling




Question;Compute the activity cost rates for materials handling, assembly, and design based on the data that follows.Materials:Cloth-$26,000Fasteners-4,000Purchased handling-40,000Material handling:Labor-8,000Equipment depreciation-5,000Electrical power-2,000Maintenance-6,000Assembly:Machine operators-5,000Design:Labor-5,000Electrical power-1,000Overhead-8,000Output totaled 40,000 units. Each unit requires three machine hours of effort. Materials handling costs are allocated to the products based on direct materials cost. Design costs are allocated based on units produced. Assembly costs are allocated based on 500 machine operator hours. (Hint: Activity cost rate = Total activity costs divided total allocation base. Examples of an allocation base include total dollars of materials, total machine operator hours, or total unit of output.)


Paper#44143 | Written in 18-Jul-2015

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