Activity Rates and Determining the cost of a product, which consist of direct materials, direct labor, and factory overhead.Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior.activity bases are as follows: Activity BudgetedActivity Cost Activity Base Casting $329,350 Machine hours Assembly 214,600 Direct labor hours Inspecting 41,650 Number of inspections Changing the characteristics of a machine to produce a different product.Setup 38,250 Number of setups Materials handling 37,800 Number of loads Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: Activity Base Entry Dining Total Machine hours 4,990 4,420 9,410 Direct labor hours 4,290 6,440 10,730 Number of inspections 1,860 590 2,450 Number of setups 200 50 250 Number of loads 660 180 840 Units produced 10,000 5,000 15,000 a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. Activity Activity Rate Casting $ per machine hour Assembly $ per direct labor hour Inspecting $ per inspection Changing the characteristics of a machine to produce a different product.Setup $ per setup Materials handling $ per load b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Product Total Activity Cost Activity Cost Per Unit Entry Lighting Fixtures $ $ Dining Room Lighting Fixtures $ $

Managerial Accounting

15th Edition

ISBN:9781337912020

Author:Carl Warren, Ph.d. Cma William B. Tayler

Publisher:Carl Warren, Ph.d. Cma William B. Tayler

Chapter4: Activity-based Costing

Section: Chapter Questions

Problem 11E: Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in...

See similar textbooks

Related questions

Concept explainers

Question

Activity Rates and Determining the cost of a product, which consist of direct materials, direct labor, and factory overhead.Product Costs using Activity-Based Costing

Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and A measure of activity that is related to changes in cost. Used in analyzing and classifying cost behavior.activity bases are as follows:

Activity	Budgeted Activity Cost	Activity Base
Casting	$329,350		Machine hours
Assembly	214,600		Direct labor hours
Inspecting	41,650		Number of inspections
Changing the characteristics of a machine to produce a different product.Setup	38,250		Number of setups
Materials handling	37,800		Number of loads

Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow:

Activity Base	Entry	Dining	Total
Machine hours	4,990		4,420	9,410
Direct labor hours	4,290		6,440	10,730
Number of inspections	1,860		590	2,450
Number of setups	200		50	250
Number of loads	660		180	840
Units produced	10,000		5,000	15,000

a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar.

Activity	Activity Rate
Casting	$	per machine hour
Assembly	$	per direct labor hour
Inspecting	$	per inspection
Changing the characteristics of a machine to produce a different product.Setup	$	per setup
Materials handling	$	per load

b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent.

Product	Total Activity Cost	Activity Cost Per Unit
Entry Lighting Fixtures	$	$
Dining Room Lighting Fixtures	$	$

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 5 steps with 4 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions