Question

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

The total factory overhead for Bardot Marine Company is budgeted for the year at \$1,243,200, divided into four activities: fabrication, \$608,000; assembly, \$248,000; setup, \$211,200; and inspection, \$176,000. 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 8,000 dlh 23,250 dlh 58 setups 100 inspections Bass boat 24,000 7,750 422 700 32,000 dlh 31,000 dlh 480 setups 800 inspections

Each product is budgeted for 7,500 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

 Activity Total cost Driver Activity rate fabrication 608000 32000 19 peer DLH Assembly 248000 31000 8 Per DLH Setup 211200 480 440 Per setup Inspection 176000 800 220 Per inspection Cost per unit Activity Rate Speedboat Bass Boat Activity OH cost Activity OH cost fabrication 19 8000 152000 24000 456000 Assembly 8 23250 186000 7750 62000 Setup 440 58 25520 422 185680 Inspection 220 100 22000 700 154000 Total cost 385520 857680 Divide: Units 7500 7500 cost per unit 51.4 114.36

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