Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below:ActivityCostActivity driverMaterial handlingP120,000Number of partsMaterial insertion240,000Number of partsAutomated350,000Machine hoursMachinery finishing150,000Labor hoursPackaging90,000Orders shipped The following data are provided for each product line: ActivityBronzeSilverGoldUnits to be produced6,0004,0002,000Orders to be shipped1,200800400Number of parts per unit4.58Machine hours per unit123Labor hours per unit233 b. the computation of the estimated volume (TOTAL PARTS, TOTAL MACHINE HOURS, TOTAL LABOR HOURS AND ORDERS TO BE SHIPPED)

Total Number of parts = Number of parts per unit x Units to be produced Total Machine hours =…

Answered: Teach Gear Inc. produces 3 types of…

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 4PB: Activity-based product costing Sweet Sugar Company manufactures three products (white sugar, brown...

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Teach Gear Inc. produces 3 types of office equipment; Bronze, silver and Gold and uses an activity-based product costing system. They have identified 5 activities. Each activity, it costs and related activity driver is summarized below:

Activity	Cost	Activity driver
Material handling	P120,000	Number of parts
Material insertion	240,000	Number of parts
Automated	350,000	Machine hours
Machinery finishing	150,000	Labor hours
Packaging	90,000	Orders shipped

The following data are provided for each product line:

Activity	Bronze	Silver	Gold
Units to be produced	6,000	4,000	2,000
Orders to be shipped	1,200	800	400
Number of parts per unit	4.	5	8
Machine hours per unit	1	2	3
Labor hours per unit	2	3	3

b. the computation of the estimated volume (TOTAL PARTS, TOTAL MACHINE HOURS, TOTAL LABOR HOURS AND ORDERS TO BE SHIPPED)

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