Reference no: EM131698776

Question: Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity Costing Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:

Product                  Machine Hours          Setups           Receiving orders           Packing Orders

Infantry                      20,000                 300                    900                           1,600

Special forces              20,000                 100                    100                              800

Costs                       $80,000            $24,000              $18,000                        $30,000

Required: 1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate.

2. Calculate consumption ratios for each activity.

3. Calculate a rate for each activity by using the associated driver.

4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3.

5. Conceptual Connection: Comment on the difference between the assignment in Requirement 1 and the activity-based assignment.