Question

Activity-Based Costing: Factory Overhead Costs The total factory overhead for Bardot Marine Company is budgeted for the year at $600,000, divided into four activities: fabrication, $204,000; assembly, $105,000; setup, $156,000; and inspection, $135,000. Bardot Marine manufactures two types of boats: speedboats and bass boats. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 2,000 dlh 1,000 dlh 300 setups 1,100 inspections Bass boat 1,000 2,000 100 400 3,000 dlh 3,000 dlh 400 setups 1,500 inspections Each product is budgeted for 250 units of production for the year.

Answer 1

The question is not incomplete as it is missing the requirement below:

A) The activity rates for each activity and

B) The activity-based factory overhead per unit for each product.

Fabrication activity rate=$68 /dlh

Assembly activity rate =$35 /dlh

Setup activity rate =$390/setup

inspection activity rate=$90/inspection

Speed boat activity based factory overhead=$387000

Bass boat activity based factory overhead=$213000

Step-by-step explanation:

Fabrication activity rate=$204,000/(2000+1000)=$68 /dlh

Assembly activity rate =$105000/(1000+2000)=$35 /dlh

Setup activity rate =$156000/(300+100)=$390/setup

inspection activity rate=$135000/(1100+400)=$90/inspection

Speed boat total overhead is computed thus:

fabrication $68*2000 136000

Assembly $35*1000 35000

setup $390*300 117000

inspection $90*1100 99000

Total 387000

bass boat total overhead is computed thus:

fabrication $68*1000 68000

Assembly $35*2000 70000

setup $390*100 39000

inspection $90*400 36000

Total 213000