Question

Spin Cycle Architecture uses three activity pools to apply overhead to its projects. Each activity has a cost driver used to allocate the overhead costs to the projects. The activities and related overhead costs are as follows: initial concept formation $52,400; design $462,000; and construction oversight $116,550. The cost drivers and estimated use are as follows. Activities Cost Drivers Estimated Use of Cost Drivers per Activity Initial concept formation Number of project changes 20 Design Square feet 154,000 Construction oversight Number of months 105

(a) Compute the predetermined overhead rate for each activity. Overhead Rate Initial concept formation $Entry field with incorrect answer now contains modified data 2620 per project change Design $Entry field with incorrect answer now contains modified data 3 per square foot Construction oversight $Entry field with incorrect answer now contains modified data 1110 Per month
(b) Classify each of these activities as unit-level, batch-level, product-level, or facility-level. Activities Level Initial concept formation Entry field with incorrect answer Design Entry field with incorrect answer Construction oversight Entry field with incorrect answer

Answer 1

Concepts 2,620 per project change

Desings 3 per square feet

contructions 1,110 per month

The product design is product level

The desing is unit level

And the construction oversights is batch level

Step-by-step explanation:

`\left[\begin{array}{ccccc}$Activity&Driver&cost&Total&Rate\\$concepts&$project changes&52400&20&2620\\$desing&$desing square feet&462000&154000&3\\$constructions&$months&116550&105&1110\\\end{array}\right]`

We divide the cost pool over the total cost driver to determinate the rate.

Desing is unit level as it is related to labor hours required for the desings if the architecture projects.

While, project change is at product level that is,

Unit-level activities are performed for each unit of production. As this is Architecture desining is done on eahc project.

Batch-level activities are performed every time a company produces another batch of a product. The construction oversight is related to the duration of each project that is for each batch

Product-level activities are performed every time a company produces a new type of product. When changing the desing, we are facing a new product.