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Figure 16-4
Villafane, SA Following Are the Actual Costs of Producing 35,000 Decals: 1,000

question 34

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Figure 16-4
Villafane, SA., has done a cost analysis for its production of decals. The following activities and cost drivers have been developed:  Activity  Cost Formula  Design £5,000+£0.05 per machine hour  Machining £25,000+£0.01 per machine hour  Setups £35 per batch  Purchasing £50+£15 per purchase order \begin{array}{ll}\text { Activity } & \text { Cost Formula } \\\text { Design } & £ 5,000+£ 0.05 \text { per machine hour } \\\text { Machining } & £ 25,000+£ 0.01 \text { per machine hour } \\\text { Setups } & £ 35 \text { per batch } \\\text { Purchasing } & £ 50+£ 15 \text { per purchase order }\end{array} Following are the actual costs of producing 35,000 decals: 1,000 machine hours; 5 batches; 30 purchase orders  Design £5,080 Machining ? Setups ? Purchasing £600\begin{array}{lr}\text { Design } & £ 5,080 \\\text { Machining } & ? \\\text { Setups } & ? \\\text { Purchasing } & £ 600\end{array} The following variances were given in the activity performance report:  Design ? Machining £40 F Setups £15 F Purchasing ?\begin{array}{lr}\text { Design } & ? \\\text { Machining } & £ 40 \mathrm{~F} \\\text { Setups } & £ 15 \mathrm{~F} \\\text { Purchasing } & ?\end{array}
-Refer to Figure 16-4. What is the actual cost of setups?


Definitions:

Estimated Cost

An approximation of the future cost of producing a product, completing a project, or maintaining a service.

FICA Taxes

Taxes paid by both employees and employers to fund Social Security and Medicare, based on a percentage of the employee's earnings.

Federal Unemployment Taxes

Taxes levied by the federal government on employers to fund state workforce agencies and unemployment insurance.

State Unemployment Taxes

Taxes imposed by state governments on employers, based on the amount of wages paid to employees, to fund unemployment compensation benefits.

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