Question

Teldar Manufacturing Company is a diversified manufacturer thatmanufactures three products (M5, Z4, and I8) in a continuousproduction process. Senior management has asked the controller toconduct an activity-based costing study. The controller identifiedthe amount of factory overhead required by the critical activitiesof the organization as follows:

1	Activity	Activity Cost Pool
2	Production	$264,000.00
3	Setup	96,000.00
4	Material handling	9,600.00
5	Inspection	50,000.00
6	Product engineering	150,000.00
7	Total	$569,600.00

The activity bases identified for each activity are asfollows:

Activity	Activity Base
Production	Machine hours
Setup	Number of setups
Material handling	Number of parts
Inspection	Number of inspectionhours
Product engineering	Number of engineeringhours

The activity-base usage quantities and units produced for thethree products were determined from corporate records and are asfollows:

	Machine	Number of	Number of	Number of	Number of
	Hours	Setups	Parts	Inspection Hours	Engineering Hours	Units
M5	1,000	60	80	450	125	1,250
Z4	800	120	150	300	175	1,000
I8	400	220	250	250	200	500
Total	2,200	400	480	1,000	500	2,750

Each product requires 0.8 machine hour per unit.

Required:

Complete the Activity Tablesfor M5, Z4 and I8.

	1. Determine the activity ratefor each activity.*
	2. Use the activity rates in(A) to determine the total and per-unit activity costs associatedwith all three products.*
	* If required, round allper-unit amounts to the nearest cent.

Required:

Complete the Activity Tablefor M5.

1. Determine the activity ratefor each activity.*

2. Use the activity rates in(A) to determine the total and per-unit activity costs associatedwith all three products.*

* If required, round all per-unit amounts to the nearestcent.