Ch5 Problem 5-54 - 5-54(50 MINUTES 1 Activity Cost Pool I...

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5-54 (50 MINUTES) 1. Activity Cost Pool Type of Activity I: Machine-related costs Unit-level II: Setup and inspection Batch-level III: Engineering Product-sustaining-level IV: Plant-related costs Facility-level 2. Calculation of pool rates: I: Machine-related costs: hrs. machine 18,000 $1,800,000 = $100 per machine hr. II. Setup and inspection: runs 80 $720,000 = $9,000 per run III. Engineering: orders change 200 $360,000 = $1,800 per change order IV. Plant-related costs: m. sq. 3,840 $384,000 = $100 per sq. m.
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5-54 (CONTINUED) 3. Unit costs for odds and ends: I: Machine-related costs: Odds: $100 per machine hr. × 8 machine hr. per unit = $800 per unit Ends: $100 per machine hr. × 2 machine hr. per unit = $200 per unit II: Setup and inspection: Odds: $9,000 per run ÷ 25 units per run = $360 per unit Ends: $9,000 per run ÷ 125 units per run = $72 per unit III: Engineering: Odds: units 1,000 75% orders change 200 order change per $1,800 × × = units 1,000 $270,000 = $270 per unit Ends: units 5,000 25% orders change 200 order change per $1,800 × × = units 5,000 $90,000 = $18 per unit IV. Plant-related costs: Odds: units 1,000 80% m. sq. 3,840 m. sq. per $100 × × = units 1,000 $307,200 = $307.20 per unit Ends: units 5,000 20% m. sq. 3,840 m.
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