Chapter+7+Review+Exercises+Solution

# Chapter+7+Review+Exercises+Solution - ACC 2362 Chapter 7...

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ACC 2362 - Chapter 7 Review Exercises Solution Armstrong Company produces a variety of bicycles. One of its plants produces two bicycles: a mountain model and a racing model. At the beginning of the year, the following data were prepared for this plant: Mountain Racing Units 400,000 125,000 Selling Price \$1,200 \$1,000 Unit Prime Cost \$400 \$500 In addition, the following information was provided so that overhead costs could be assigned to each product: Activity Name Activity Driver Mountain Racing Activity Cost Machining Machine hours 250,000 250,000 \$10,000,000 Engineering Engineering hours 150,000 100,000 \$5,500,000 Packing Packing orders 350,000 50,000 \$4,000,000 Armstrong Company uses activity-based costing to calculate product costs. 1) Calculate activity rates for machining, engineering and packing. Activity Name Activity Cost Activity Rate Machining \$10,000,000 500,000 \$20.000 Engineering \$5,500,000 250,000 \$22.000 Packing \$4,000,000 400,000 \$10.000 \$19,500,000 2) Calculate the per unit product cost for mountain bikes and racing bikes. Activity Rate
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