The Canine Company Has Total Estimated Factory Overhead for the Year

question 63

Essay

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.

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Definitions:

Loudness

The perception of the intensity of sound waves, often described as the volume, and can be measured in decibels.

Cochlea

A coiled, bony, fluid-filled tube in the inner ear; sound waves traveling through the cochlear fluid trigger nerve impulses.

Hammer, Anvil, Stirrup

The three smallest bones in the human body, located in the middle ear, that play a key role in transmitting sound vibrations to the inner ear.

Cochlea

A spiral-shaped cavity in the inner ear that plays a key role in hearing by converting sound vibrations into nerve impulses.