The Turtle Company Has Total Estimated Factory Overhead for the Year

question 72

Short Answer

The Turtle Company has total estimated factory overhead for the year of $1,200,000, divided into four activities: fabrication, $600,000; assembly, $240,000; setup, $200,000; and materials handling, $160,000. Turtle manufactures two products, Boogie Boards and Surf Boards. The activity-base usage quantities for each product by each activity are as follows:
Each product is budgeted for 10,000 units of production for the year.
Determine:
(a) the activity rates for each activity and
(b) the factory overhead cost per unit for each product using activity-based costing.

---

Definitions:

Misappropriation

The illegal, unethical, or unauthorized use of someone else's property or funds, especially for one's own use or benefit.

Short-swing Profits

Profits earned by corporate insiders from the purchase and sale, or sale and purchase, of company stock within a six-month period, which are subject to recovery by the corporation under specific regulations.

Tippees

Individuals who receive confidential information about a company and use it for stock trading, often illegally.

Corporate Insiders

Individuals within an organization, such as directors, officers, or major shareholders, who have access to private information about the company.