The total factory overhead for Diva-nation is budgeted for the year at $179,941,

Question

The total factory overhead for Diva-nation is budgeted for the year at $179,941, divided into four activities: cutting, $18,560; sewing, $34,319; setup, $95,749; and inspection, $31,313. Diva-nation manufactures two types of men's pants: jeans and khakis. The activity-base usage quantities for each product by each activity are as follows: Cutting Sewing Setup Inspection Jeans 795 dlh 1,225 dlh 1,250 setups 3,020 inspections Khakis 1,190 830 995 1,990 1,985 dlh 2,055 dlh 2,245 setups 5,010 inspections Each product is budgeted for 21,000 units of production for the year. Required: Complete the Activity Tables for jeans and khakis. A. Determine the activity rates for each activity. Enter these rates in the Activity Rate columns.* B. Use the activity rates in (A) to determine the activity-based factory overhead per unit for each product. * When required, round all per-unit and activity rate answers to the nearest cent.

Explanation / Answer

1. activity table for jeans is already given in question.

total activity cost (given ) = $100079

budgeted items = 21000

factory overhead per unit = total activity cost / budgeted items

= 100079 / 21000

= $ 5 (round off)

2.activity table for khakis

  

# activity rate ( already given in question)

for cutting = total cost of cutting / total dlh

=18560 / 1985

= $ 9.35

all other rates can also be computed by above formula.

activity usage base activity rate# activity cost cutting 1190 dlh $ 9.35 /dlh 11127 sewing 830 dlh $16.70 /dlh 13861 setup 995 setup $42.65/ setup 42437 inspections 1990 inspection $6.25/ inspection 12438 TOTAL $ 79863 / budgeted items 21000 factory overhead per unit $ 4 (round off)

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