The Canine Company has total estimated factory overhead for the year of $2,400,000,divided into four activities: fabrication,$1,200,000; assembly,$480,000; setup,$400,000; and materials handling,$320,000.Canine manufactures two products,Standard Crates and Deluxe Crates.The activity-base usage quantities for each product by each activity are as follows:
Each product is budgeted for 20,000 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:
Personal-Selling
A direct sales approach where salespeople interact face-to-face with potential buyers to promote and sell products or services.
Specialist
An individual or business highly skilled and knowledgeable in a specific area or field, offering expertise-based services or products.
Farmer Salesperson
An individual who is both a farmer and takes an active role in marketing and selling the agricultural products directly to consumers or retailers.
Selling Activity
The actions involved in promoting and selling goods or services to customers.
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