Question

Rizzo Manufacturing produces two types of cameras: 35mm and digital. The cameras are produced using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:Product Machine Hours Setups Receiving Orders Packing Orders

35mm 10,000 100 200 400
Digital 10,000 250 800 2000
Cost $60,000 $40,000 $8,000 $24,000

A. Calculate the total overhead assigned to each the 35mm camera using only machine hours to calculate a plant-wide rate.
B. Using an activity rate for receiving based on receiving orders, assign receiving costs to the 35mm camera.
C. Calculate an activity rate for packing based on packing orders.

Answer 1

The question asks for the calculation of overheads allocated to 35mm cameras using a plant-wide rate and activity-based rates for receiving and packing. The required calculations could not be completed for parts A and B due to insufficient data. For part C, the packing activity rate can be calculated based on packing orders.

Step-by-step explanation:

To calculate the total overhead assigned to the 35mm camera using a plant-wide rate based solely on machine hours, we would divide the total overhead costs by the total machine hours for all products to obtain the rate, and then multiply this rate by the machine hours used for the 35mm camera. However, the data provided in the question does not include the total machine hours used for all products, therefore we cannot complete the calculation.

To assign receiving costs to the 35mm camera using an activity rate for receiving based on receiving orders, we divide the receiving overhead cost by the total number of receiving orders for all products, and then multiply the result by the number of receiving orders for the 35mm camera. However, similar to a, the necessary data for all products is missing, which prevents us from completing this calculation as well.

For calculating the activity rate for packing, the total overhead assigned to packing ($24,000) is divided by the total number of packing orders (400 for 35mm + 2000 for Digital = 2400 orders). This gives us an activity rate for packing.

Answer 2

Total overhead assigned to each the 35mm camera $ 66,000

An Activity Rate for receiving $8 per receiving order

Receiving costs for 35mm camera $1600

An Activity Rate for packing $ 10 per packing order

Step-by-step explanation:

Product Machine Hours Setups Receiving Orders Packing Orders

35mm 10,000 100 200 400

Digital 10,000 250 800 2000

Cost $60,000 $40,000 $8,000 $24,000

Total Overhead Costs= $ 60,000 + $ 40,000 + $ 8000+ $ 24,000= $132,000

Total overhead assigned to each the 35mm camera=( Total Costs/Total Machine Hours) * 35mm camera machine hours

Total overhead assigned to each the 35mm camera= ($ 132,000/ 20,000)10,000= $ 66,000

An Activity Rate for receiving based on receiving orders= 8000/1000= $8 per receiving order

Receiving costs for 35mm camera= 8 * 200= $1600

An Activity Rate for packing based on packing orders = 24000/ 2400= $ 10 per packing order