Asked by Jalen Denoncourt on Jun 03, 2024
Verified
Valhalla Company manufactures small table lamps and desk lamps. The following shows the activities per product: Using the following information prepared by Valhalla Company, determine (a) the activity rates for each activity and (b) the activity-based factory overhead per unit for each product.
Activity Rates
The costs assigned to a cost-driving activity, used in activity-based costing to allocate expenses to products or services.
Activity-based Factory Overhead
A method of allocating overhead costs based on each product's activities, aiming to accurately distribute expenses related to manufacturing.
- Utilize the principles of activity-based costing to spread indirect costs over assorted products or services.
Verified Answer
DB
Dallas BrownJun 06, 2024
Final Answer :
a. Setups: $160,000 ÷ 40,000 = $4 per setup
Inspections: $230,000 ÷ 46,000 = $5 per inspection
Assembly: $324,000 ÷ 54,000 = $6 per direct labor hour
b. Small table lamp: Desk lamp:
Inspections: $230,000 ÷ 46,000 = $5 per inspection
Assembly: $324,000 ÷ 54,000 = $6 per direct labor hour
b. Small table lamp: Desk lamp:
Learning Objectives
- Utilize the principles of activity-based costing to spread indirect costs over assorted products or services.
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