Respuesta :
Under activity-based costing (ABC), the amounts of materials handling costs assigned to the following units are:
(a) One mobile safe $210 per unit .
(b) One walk-in safe $168 per unit.
What is activity-based costing?
Activity-based costing is the costing method that assigns overhead and indirect costs to products and services based on consumption of activities.
Data and Calculations:
Materials handling costs = $168,000
Purchasing activity costs = $96,000
Total estimated manufacturing overhead = $264,000 ($168,000 + $96,000)
The following figures are assumed:
Activities:
Materials handling cost $168,000
Total hours of materials handling = 40,000 hours
Activity rate = $4.20 ($168,000/40,000) per hour
Purchasing activity cost = $96,000
Number of units purchased = 30,000
Activity rate = $3.20 ($96,000/30,000)
Consumption of activities:
Material Handling hours Number of Units used
Mobile safe per unit 50 hours 3 units
Walk-in safe per unit 40 hours 2 units
Overhead assigned:
Material Handling
Mobile safe per unit 50 hours x $4.20 = $210
Walk-in safe per unit 40 hours x $4.20 = $168
Thus, under activity-based costing (ABC), the amounts of materials handling costs assigned to the following units are as indicated above.
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