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:
Compounded Monthly
Interest calculation method where interest is added to the principal sum at the end of each month, leading to interest on interest.
Balance
The amount of money currently in an account or owed on an account at any given time.
Monthly Payments
Regular payments made towards a loan or mortgage each month.
Compounded Semi-Annually
Calculation of interest on the initial principal and the accumulated interest over the first 6 months repeated every half year.
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