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3 September, 10:15

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.

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  1. 3 September, 10:43
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    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

    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
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