Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.ActivityCostCost DriverMaterial handling$281,000 Number of parts Material insertion 3,060,000 Number of parts Automated machinery 873,000 Machine hours Finishing 194,000 Direct labor hours Packaging 194,000 Orders shipped Total$4,602,000 The following information pertains to the three product lines for next year: Economy Standard DeluxeUnits to be produced 14,300 9,700 2,600 Orders to be shipped 1,910 580 270 Number of parts per unit 15 20 25 Machine hours per unit 1 2 5 Labor hours per unit 3 3 3 What is Barnett’s pool rate for the packaging activity?

The pool rate of an activity is the rate of overhead that to be charged to the products based on the…

Answered: Barnett Products manufactures three…

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter5: Product And Service Costing: Job-order System

Section: Chapter Questions

Problem 27P: Firenza Company manufactures specialty tools to customer order. Budgeted overhead for the coming...

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Barnett Products manufactures three types of remote-control devices: Economy, Standard, and Deluxe. The company, which uses activity-based costing, has identified five activities (and related cost drivers). Each activity, its budgeted cost, and related cost driver is identified below.

Activity	Cost	Cost Driver
Material handling	$	281,000	Number of parts
Material insertion		3,060,000	Number of parts
Automated machinery		873,000	Machine hours
Finishing		194,000	Direct labor hours
Packaging		194,000	Orders shipped
Total	$	4,602,000

The following information pertains to the three product lines for next year:

	Economy		Standard	Deluxe
Units to be produced		14,300			9,700	2,600
Orders to be shipped		1,910			580	270
Number of parts per unit		15			20	25
Machine hours per unit		1			2	5
Labor hours per unit		3			3	3

What is Barnett’s pool rate for the packaging activity?

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