Greenspace, Inc., manufactures a line of products used in environmental quality
ID: 2484066 • Letter: G
Question
Greenspace, Inc., manufactures a line of products used in environmental quality testing. The company recently made substantial changes in its production facilities, including installing robotic assembly units. Management now wants to switch to activity-based costing. Relevant data for three of its water quality testing devices X, Y, and Z are as follows:
The following information is available regarding budgeted overhead costs and bases that will be used for ABC costing:
Required: Create an Excel spreadsheet that computes the total product costs for X, Y, and Z under ABC.
Product X Y Z Number of parts 29 38 41 Direct Labor Hours 2 1 3 Robot hours 1 1 1 Costs: Direct Materials $325 $270 $400 Direct labor ($20/hour)Explanation / Answer
Solution:
Calculation of total cost for product X, Y and Z by using ABC:
Material Activities Robotic All Other Budgeted Overhead 600,000 800,000 500,000 Bases 40,000 (parts) 5,000 (robot hours) 20,000 (labor hours) Rate 15 160 25Related Questions
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