Determine factory overhead cost per unit for each product

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Reference no: EM131908676

Problem

Mainline Marine Company has total estimated factory overhead for the year of $2,090,000, divided into four activities: fabrication, $750,000; assembly, $240,000; setup, $600,000; and inspection, $500,000. Mainline manufactures two types of boats: a speedboat and a bass boat. The activity-base usage quantities for each product by each activity are as follows:

	Fabrication	Assembly	Setup	Inspection
Speedboat	1,200 dlh	1,800 dlh	60 setups	600 inspections
Bass boat	1,800 dlh	1,200 dlh	100 setups	200 inspections
	3,000dlh	3,000 dlh	160 setups	800 inspections

Each product is budgeted for 200 units of production for the year.

a. Determine the activity rates for each activity.

Fabrication	$ per dlh
Assembly	$ per dlh
Setup	$ per setup
Inspection	$ per inspection

b. Determine the factory overhead cost per unit for each product, using activity-based costing.

Reference no: EM131908676

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