Question

The total factory overhead for Bardot Marine Company is budgeted for the year at $1,334,300, divided into four activities: fabrication, $533,000; assembly, $215,000; setup, $319,800; and inspection, $266,500. 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	10,250	dlh	32,250	dlh	74	setups	128	inspections
Bass boat	30,750		10,750		541		897
	41,000	dlh	43,000	dlh	615	setups	1,025	inspections

Each product is budgeted for 4,000 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

Answer 1

a. Determine the activity rates for each activity.

Fabrication	(533000/41000) = $13 per direct labor hour
Assembly	(215000/43000) = $5 per direct labor hour
Setup	(319800/615) = $520 per setup
Inspection	(266500/1025) = $260 per inspection

1) calculate per unit

	Speedboat	Bass boat
Fabrication	133250	399750
Assembly	161250	53750
Setup	38480	281320
Inspection	33280	233220
Total	366260	968040
Unit	4000	4000
Unit cost	91.57	242.01