Bark Mode, Incorporated Produces and Distributes Two Types of Security

question 16

Essay

Bark Mode, Incorporated produces and distributes two types of security systems, Standard and Deluxe.Budgeted cost and activity for each of its three activity cost pools are shown below.
The company plans to produce and sell 120,000 standard units and 80,000 deluxe units.
$$\begin{array}{r} { \text { Budgeted Activity } }\quad\quad\quad\quad\quad \\\begin{array} { | l | r | l | l | } \hline \text { Activity Cost Pool } & \begin{array} { l } \text { Budgeted } \\\text { Cost }\end{array} & { \text { Stardard } } & { \text { Deluxe } } \\\hline \text { Packaging } & \$ 100,000 & \begin{array} { l } 120,000 \text { finished } \\\text { units }\end{array} & \begin{array} { l } 80,000 \text { firished } \\\text { urits }\end{array} \\\hline \text { Material hardling } & \$ 49,600 & 600,000 \text { total parts } & 640,000 \text { total parts } \\\hline \text { Production setups } & \$ 120,000 & 6 \text { total setups } & 14 \text { total setups } \\\hline\end{array}\end{array}$$ a.Compute the approximate overhead cost per unit of standard under activity-based costing.
b.Compute the approximate overhead cost per unit of deluxe under activity-based costing.

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Definitions:

Free Cash Flow

The amount of cash a company generates after accounting for cash outflows to support operations and maintain its capital assets, indicative of financial health.

Solvency-Based Measure

An assessment of a company's ability to meet its long-term financial commitments and continue its operations into the foreseeable future.

Operating Activities

Activities that relate to the core business operations of a company, including revenue and expense transactions that affect the net income.

Net Capital Expenditures

The amount spent on acquiring or upgrading physical assets, less any sales of fixed assets, during a given period.