Adirondack Corporation is estimating activity costs associatedwith producing two different sized e-reader tablets. The indirectlabor can be traced to three separate activity pools. The budgetedactivity cost and activity base information, along with theestimated activity-base information, is provided below.
ActivityCost Activity Base
Purchasing $250,000 Number of purchase orders
Materials handling $500,000 Number of moves
Production 1,350,000 Machinehours
TOTAL $2,100,000
Number of Purchase Orders; Number of Moves; Machine Hours;Number of Units
7â tablet 3,000 1,500 2,500 2,500
10" tablet 5,000 600 7,500 3,500
TOTALS 8,000 2,100 10,000 6,000
Required: Determine the Activity rate for eachactivity cost pool. All work must be shown for credit.
Please label your answer as the activity rate for: Purchasing;Materials handling; & Production.
Using the information from the activity based costingproblem:
If traditional costing had been used and number of machine hourswere the allocation base, what would the single allocation rate be?Would applying a single allocation rate be a wise decision to applycosts in this scenario? Why or why not
If traditional costing had been used and number of machine hourswere the allocation base, what would the single allocation rate be?Would applying a single allocation rate be a wise decision to applycosts in this scenario? Why or why not?
Adirondack Corporation is estimating activity costs associatedwith producing two different sized e-reader tablets. The indirectlabor can be traced to three separate activity pools. The budgetedactivity cost and activity base information, along with theestimated activity-base information, is provided below.
ActivityCost Activity Base
Purchasing $250,000 Number of purchase orders
Materials handling $500,000 Number of moves
Production 1,350,000 Machinehours
TOTAL $2,100,000
Number of Purchase Orders; Number of Moves; Machine Hours;Number of Units
7â tablet 3,000 1,500 2,500 2,500
10" tablet 5,000 600 7,500 3,500
TOTALS 8,000 2,100 10,000 6,000
Required: Determine the Activity rate for eachactivity cost pool. All work must be shown for credit.
Please label your answer as the activity rate for: Purchasing;Materials handling; & Production.
Using the information from the activity based costingproblem:
If traditional costing had been used and number of machine hourswere the allocation base, what would the single allocation rate be?Would applying a single allocation rate be a wise decision to applycosts in this scenario? Why or why not
If traditional costing had been used and number of machine hourswere the allocation base, what would the single allocation rate be?Would applying a single allocation rate be a wise decision to applycosts in this scenario? Why or why not?