70.2K

Verified Solution

Link Copied!

Various activities at Companhia de Textils, S.A., a manufacturing company located in Brazil, are listed below. The company makes a variety of products in its plant outside So Paulo. Required: Classify each of the activities as either a unit-level, batch-level, product-level, or facility-level activity. Activity Classification Activity a. Preventive maintenance is performed on general-purpose production equipment b. Products are assembled by hand. C. A security guard patrols the company grounds after normal working hours. d. Purchase orders are issued for materials to be used in production. e. Modifications are made to product designs. f. New employees are hired by the personnel office. g. Machine settings are changed between batches of different products. h. Parts inventories are maintained in the storeroom. (Each product requires its own unique parts.) i. Insurance costs are incurred on the company's facilities. Required information [The following information applies to the questions displayed below.) Adria Company recently implemented an activity-based costing system. At the beginning of the year, management made the following estimates of cost and activity in the company's five activity cost pools: Activity Cost Pool Labor-related Purchase orders Material receipts Relay assembly General factory Activity Measure Direct labor-hours Number of orders Number of receipts Number of relays Machine-hours Expected Overhead Cost $ 32,000 $ 3,000 $ 9,000 $ 12,000 $ 200,000 Expected Activity 8,000 DLHS 3,000 orders 900 receipts 2,000 relays 40,000 MHS Required: 1. Compute the activity rate for each of the activity cost pools. Activity Cost Pool Labor-related Purchase orders Material receipts Relay assembly General factory Activity Rate per DLH per order per receipt per relay per MH

Answer & Explanation Solved by verified expert

See Answer