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Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic. ActivityExpected CostsExpected ActivityHandling materials$625,000  100,000partsInspecting product 900,000  1,500batchesProcessing purchase orders 105,000  700ordersPaying suppliers 175,000  500invoicesInsuring the factory 300,000  40,000square feetDesigning packaging 75,000  2models    Required:Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.)

Question

Xie Company identified the following activities, costs, and activity drivers for 2017. The company manufactures two types of go-karts: Deluxe and Basic.
 

Activity Expected Costs Expected Activity
Handling materials $ 625,000     100,000 parts
Inspecting product   900,000     1,500 batches
Processing purchase orders   105,000     700 orders
Paying suppliers   175,000     500 invoices
Insuring the factory   300,000     40,000 square feet
Designing packaging   75,000     2 models
 

   
Required:
Compute the activity rate for each activity, assuming the company uses activity-based costing. (Round activity rate answers to 2 decimal places.)
 

check_circleAnswer
Step 1

Activity-based costing is the managerial level costing which provides the overhead of each activity cost. In other words, activity-based costing is defined each activity cost which is followed in the product.

Step 2

In this question, there are two types of product which produce by the company ...

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Accounting

Activity Based Costing

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