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28 Sep 2019
Creathon Company's plant in Columbus, Ohio, manufacturestwoproducts: BR12 and BR15. Product BR15 has more complexdesign andrequires more setup time than BR12. Setups forBR12 require 2 hourson average; setups for BR15 require 3hours. Creathon's setupdepartment employs 10 workers whoseaverage wage is $10 per hour;fringe benefits cost 38% ofwages. Other costs for setup activitiesamount to $25 persetup. Creathon plans to use all 10 workers for 40hours eachfor the first 3 weeks of the winter quarter. The numberofsetups for these 3 weeks follow:
Numberof Setups
Week BR12BR15
1 85 75
2 90 70
3 80 80
a. Determine the actual setup activity cost driver rate foreachweek based on (1) the number of setups and (2) the number ofsetuphours.
b. Is either of the two activity cost driver rates or someotherrate appropriate in this case?Why?
Creathon Company's plant in Columbus, Ohio, manufacturestwoproducts: BR12 and BR15. Product BR15 has more complexdesign andrequires more setup time than BR12. Setups forBR12 require 2 hourson average; setups for BR15 require 3hours. Creathon's setupdepartment employs 10 workers whoseaverage wage is $10 per hour;fringe benefits cost 38% ofwages. Other costs for setup activitiesamount to $25 persetup. Creathon plans to use all 10 workers for 40hours eachfor the first 3 weeks of the winter quarter. The numberofsetups for these 3 weeks follow:
Numberof Setups
Week BR12BR15
1 85 75
2 90 70
3 80 80
a. Determine the actual setup activity cost driver rate foreachweek based on (1) the number of setups and (2) the number ofsetuphours.
b. Is either of the two activity cost driver rates or someotherrate appropriate in this case?Why?
Numberof Setups
Week BR12BR15
1 85 75
2 90 70
3 80 80
a. Determine the actual setup activity cost driver rate foreachweek based on (1) the number of setups and (2) the number ofsetuphours.
b. Is either of the two activity cost driver rates or someotherrate appropriate in this case?Why?
Jean KeelingLv2
28 Sep 2019