Question

# Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for...

Activity-Based Costing: Factory Overhead Costs

The total factory overhead for Bardot Marine Company is budgeted for the year at \$925,250, divided into four activity pools: fabrication,, \$459,000; assembly, \$203,000; setup, \$141,750; and inspection, \$121,500. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows:

 Fabrication Assembly Setup Inspection Speedboat 6,750 dlh 21,750 dlh 49 setups 84 inspections Bass boat 20,250 7,250 356 591 27,000 dlh 29,000 dlh 405 setups 675 inspections

Each product is budgeted for 2,500 units of production for the year.

a. Determine the activity rates for each activity.

 Fabrication \$ per direct labor hour Assembly \$ per direct labor hour Setup \$ per setup Inspection \$ per inspection

b. Determine the activity-based factory overhead per unit for each product. Round to the nearest whole dollar.

 Speedboat \$ per unit Bass boat \$ per unit

#### Homework Answers

Answer #1
 a Fabrication 17 per direct labor hour =459000/27000 Assembly 7 per direct labor hour =203000/29000 Setup 350 per setup =141750/405 Inspection 180 per inspection =121500/675 b Speedboat Bassboat Activity rate Activity Overhead allocated Activity Overhead allocated Fabrication 17 6750 114750 20250 344250 Assembly 7 21750 152250 7250 50750 Setup 350 49 17150 356 124600 Inspection 180 84 15120 591 106380 Total 299270 625980 Units 2500 2500 Overhead per unit 120 250
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