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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 $675,000 (80% for injection molding and 20% 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: Required: 1. Calculate the activity rate for the plastic injection molding activity (round to two decimal places). 2. Calculate the activity rate for the decal application activity (round to two decimal places).

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Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773
BuyFind

Managerial Accounting: The Corners...

7th Edition
Maryanne M. Mowen + 2 others
Publisher: Cengage Learning
ISBN: 9781337115773

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Chapter
Section
Chapter 5, Problem 38E
Textbook Problem

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 $675,000 (80% for injection molding and 20% 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:

Chapter 5, Problem 38E, Activity Rates Patten Company uses activity-based costing (ABC). Patten manufactures toy cars using

Required:

  1. 1. Calculate the activity rate for the plastic injection molding activity (round to two decimal places).
  2. 2. Calculate the activity rate for the decal application activity (round to two decimal places).

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Chapter 5 Solutions

Managerial Accounting: The Cornerstone of Business Decision-Making
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