ACC 2362 - Chapter 7 Review ExercisesArmstrong Company produces a variety of bicycles. One of its plants produces two bicycles: a mountainmodel and a racing model. At the beginning of the year, the following data were prepared for this plant:MountainRacingUnits400,000125,000Selling 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 NameActivity DriverMountainRacingActivity CostMachiningMachine hours250,000 250,000 $10,000,000 EngineeringEngineering hours150,000 100,000 $5,500,000 PackingPacking orders350,000 50,000 $4,000,000 Armstrong Company uses activity-based costing to calculate product costs.1) Calculate activity rates for machining, engineering and packing.2) Calculate the per unit product cost for mountain bikes and racing bikes.3) Using a plant wide rate using machine hours as the driver calculate the amount of applied overhead.4) What is the per unit product cost for mountain bikes and racing bikes using a plant wide rate?
This is the end of the preview.
access the rest of the document.