Magnolia Company has identified seven activities as part of its manufacturing pr

Question

Magnolia Company has identified seven activities as part of its manufacturing process and chosen corresponding activity drivers for each activity. The chart below lists the total cost of each activity, the amount of activity driver used for each of Magnolia's two products, the activity rate, and the activity cost assigned to each product. Fill in the blanks below: Driver Usage Activity Cost: Prod. 1 Activity Cost: Prod. 2 Activity Design Preparation$ 49,600 Labor hours Machining 142,290 Machine hours Finishing Inspection Packaging Shipping Cost Activity Driver Prod. 1 Prod. 2 Activity Rate 910 1,260 3,000 $26,040 Design time hour hour 27 /hour 46/batch 7 /unit 301 /order 24,000 $42,390 215320$ Batches Units Orders 4,550$ 7,070 60 $ 12,341 $ 13,566 Packages 83 /package 3,689

Explanation / Answer

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Design Activity Total Cost 26040 Total Activity Driver 910+1260 2170 Activity Rate 26040/2170 12 Activity Cost-Prod 1 910*12 10920 Activity Cost-Prod 2 1260*12 15120 Preparation Total Cost 49600 Activity Cost-Prod 1 24000 Activity Cost-Prod 2 49600-24000 25600 Activity Rate Prod 24000/3000 8 Activity Driver 2 25600/8 3200 Machining Total Cost 142290 Activity Rate 27 Total activity Driver 142290/27 5270 Activity Cost-Prod 1 42390 Activity Cost-Prod 2 142290-42390 99900 Activity Driver 1 42390/27 1570 Activity Driver 2 99900/27 3700 Finishing Total Activity Driver 215+320 535 Activity Rate 46 Activity Cost-Prod 1 215*46 9890 Activity Cost-Prod 2 320*46 14720 Total Cost 24610 Inspection Activity Cost-Prod 1 4550 Activity Cost-Prod 2 7070 Total Cost 11620 Activity Driver-1 4550/7 650 Activity Driver-2 7070/7 1010 Packaging Activity Cost-Prod 1 12341 Activity Rate 301 Activity Driver-1 12341/301 41 Activity Cost Prod2 60*301 18060 Total Cost 12341+18060 30401 Shipping Total Cost 13566 Activity Cost Prod-2 3689 Activity Cost Prod-1 13566-3689 9877 Activity Rate 9877/83 119 Activity Driver-2 3689/119 31

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