Company uses activity-based costing (ABC). Patten manufactures toy cars using two activities: plastic injection molding and decal application. Patten's 20x1 total budgete ead costs for these two activities are $540,000 (70% for injection molding and 30% for decal application). Molding overhead costs are driven by the number of pounds of p re molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 20X1 are as follows: Is of plastic molded 2,070,000 er of decals applied 264,000 red: Iculate the activity rate for the plastic injection molding activity. Round your answer to the nearest cent. per pound molded Iculate the activity rate for the decal application activity. Round your answer to the nearest cent. per decal applied

Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
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Chapter4: Activity-based Costing
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Problem 4BE: Activity-based costing: selling and administrative expenses Jungle Junior Company manufactures and...
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Activity Rates
Patten Company uses activity-based costing (ABC). Patten manufactures toy cars using two activities: plastic injection molding and decal application. Patten's 20X1 total budgeted
overhead costs for these two activities are $540,000 (70% for injection molding and 30% for decal application). Molding overhead costs are driven by the number of pounds of plastic
that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 20X1 are as follows:
Pounds of plastic molded
2,070,000
Number of decals applied
264,000
Required:
1. Calculate the activity rate for the plastic injection molding activity. Round your answer to the nearest cent.
$
per pound molded
2. Calculate the activity rate for the decal application activity. Round your answer to the nearest cent.
per decal applied
Transcribed Image Text:Activity Rates Patten Company uses activity-based costing (ABC). Patten manufactures toy cars using two activities: plastic injection molding and decal application. Patten's 20X1 total budgeted overhead costs for these two activities are $540,000 (70% for injection molding and 30% for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 20X1 are as follows: Pounds of plastic molded 2,070,000 Number of decals applied 264,000 Required: 1. Calculate the activity rate for the plastic injection molding activity. Round your answer to the nearest cent. $ per pound molded 2. Calculate the activity rate for the decal application activity. Round your answer to the nearest cent. per decal applied
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