Activity-Based Costing: Factory Overhead Costs The total factory overhead for Ba

Question

Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $1,174,400, divided into four activity pools: fabrication,, $456,000; assembly, $175,000; setup, $296,400; and inspection, $247,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection 68 setups 502 570 setups 119 inspections 831 950 inspections Speedboat 9,500 dih 26,250 dlh Bass boat 28,500 8,750 38,000 dlh 35,000 dlh Each product is budgeted for 3,000 units of production for the year. a. Determine the activity rates for each activity Fabrication Assembly Setup Inspection b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar Speedboat Bass boat per direct labor hour per direct labor hour per setup per inspection per unit per unit

Explanation / Answer

a) Determine activity rate :

b) calculate activity overhead cost per unit :

Fabrication (456000/38000) 12 Per labour hour Assembly (175000/35000) 5 per labour hour Setup (296400/570) 520 per setups Inspection (247000/950) 260 per inspection

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