Question

Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows:

	Vaquero		Vaquera
Cutting hours	2,100		5,400
Assembly hours	2,950		4,650
Inspection hours	700		2,430
Rework hours	300		450

The following activity data have been collected:

Cutting	$195,000
Assembling	$228,000
Inspecting	$62,600
Reworking	$52,500

Required:

Calculate the activity rates that would be used to assign costs to each product. If required, round your answers to the nearest cent.

Cutting:	$___________ per cutting hour
Assembling:	$___________ per assembling hour
Inspecting:	$____________per inspecting hour
Reworking:	$___________ per reworking hour

Answer 1

Activity Cost Pool	Total Cost	Activity Drivers of Vaquero (a)	Activity Drivers of Vaquera (b)	Total Activity drivers (a+b)	Activity Rates (Total Cost/Total Activity drivers)	Activity Measure
Cutting hours	195,000	2,100	5,400	7,500	26.00	per cutting hour
Assembly hours	228,000	2,950	4,650	7,600	30.00	per assembling hour
Inspection hours	62,600	700	2,430	3,130	20.00	per inspecting hour
Rework hours	$52,500	300	450	750	70.00	per reworking hour

The activity rates that would be used to assign costs to each product:

Cutting:	$26 per cutting hour
Assembling:	$30 per assembling hour
Inspecting:	$20 per inspecting hour
Reworking:	$70 per reworking hour

Kindly comment if you need further assistance.

Thanks‼!