Question

Xie Company identified the following activities, costs, and activity drivers for this year. The company manufactures...

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

Activity Expected Costs Expected Activity
Handling materials $ 655,000 100,000 parts
Inspecting product 930,000 1,500 batches
Processing purchase orders 135,000 700 orders
Paying suppliers 205,000 500 invoices
Insuring the factory 330,000 40,000 square feet
Designing packaging 105,000 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.)

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

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


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Answer #1
Activity Expected Costs
(A)		 Activity driver
(B )		 Activity rate
(A / B )
Handling materials $ 655,000    100,000 parts $ 6.55 per part
Inspecting product $ 930,000 1,500 batches $ 620 per batch
Processing purchase orders $ 135,000 700 orders $ 192.86 per order
Paying suppliers $ 205,000 500 invoices $ 410 per invoice
Insuring the factory $ 330,000 40,000 square feet $ 8.25 per square feet
Designing packaging $ 105,000 2 models $ 52,500 per model
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