and $ for the cutting and Finishing departments, respectively. Round per unit amounts to the nearest whole cent.
Department
Production Department Rate
Cutting Department
per direct labor hour
Finishing Department
$
per direct labor hour
Determine the total and perunit factory overhead costs allocated to each product, using the multiple production department overhead rates in Round per unit amounts to the nearest whole cent.
Determine the activity rates, assuming that the indirect labor is associated with activities rather than with the production departments. Round per unit amounts to the nearest whole cent.
Activity
Production Control
Materials Handling
Cutting Department
Finishing Department
Activity Rate
per prod. run
$
per move
per dlh
per dlh
Determine the total and perunit cost assigned to each product under activitybased costing. Round the per unit amounts to the nearest whole cent.
activitybased costing.
The plantwide overhead method allocates $
of overhead to each product, while the multiple production department method allocates $
overhead to snowboards and
to skis.
Both the plantwide and multiple production department methods
distort the allocation of overhead because they
iccount for how each product consumes overhead. In
contrast, activitybased costing allocates $
of factory overhead to snowboards and
to skis. Activitybased costing
accurately allocates factory overhead because
for how each product consumes overhead. Snowboards consume.
direct labor hours in the Finishing Department, which has
overhead. In additior
snowboards consume.
production control and materials handling overhead than do skis. This is because snowboards are made in
lots, representing a
activity costs than skis.
