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Activity Rates and Product Costs using Activity-Based Costing Lonsdal.pdf

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Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Feedback T check My Work a. Budgeted Activity Cost + Total Activity-Base Usage = Activity Rate for each activity b. Calculate for each product: Activity-Base Usage x Activity Rate from Req. (a) = Activity cost for each activity. Sum all activity costs to obtain the total cost per product. Divide total costs by number of units to obtain activity cost per unit..

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Activity Rates and Product Costs using Activity-Based Costing Lonsdale Inc. manufactures entry and dining room lighting fixtures. Five activities are used in manufacturing the fixtures. These activities and their associated budgeted activity costs and activity bases are as follows: Corporate records were obtained to estimate the amount of activity to be used by the two products. The estimated activity-base usage quantities and units produced follow: a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. a. Determine the activity rate for each activity. If required, round the rate to the nearest dollar. b. Use the activity rates in (a) to determine the total and per-unit activity costs associated with each product. Round the per unit amounts to the nearest cent. Feedback T check My Work a. Budgeted Activity Cost + Total Activity-Base Usage = Activity Rate for each activity b. Calculate for each product: Activity-Base Usage x Activity Rate from Req. (a) = Activity cost for each activity. Sum all activity costs to obtain the total cost per product. Divide total costs by number of units to obtain activity cost per unit.

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