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Author Question: Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead ... (Read 91 times)

Tiffanyanne824

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Bayline, Inc. manufactures two types of surf boards, Beginner and Longboard. Manufacturing overhead has been applied on the basis of direct labor hours. Bayline gathers some activity information and is interested in implementing an activity-based costing system. The company wants all overhead costs to be allocated to products. The overhead cost pools and activity drivers are as follows:

Activity PoolOverhead CostsTotal Driver Usage
Machine setup$36,0001,000 setups
Cutting/Assembly   62,00031,000 machine hours
Total overhead costs$98,000

Other product information follows:

BeginnerLongboard
Units produced40,00015,000
Direct material$10 per unit$25 per unit
Direct labor  $8 per unit$10 per unit
Direct labor hours  6,000  8,000
Machine setups     750     250
Machine hours 20,000  11,000

Required:

a.Using the traditional method, determine the overhead rate per direct labor hour.
b.Using the activity-based costing approach, determine the two activity rates.
c.Using the activity-based costing approach, determine the unit product cost for the
Beginner board.


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Marked as best answer by Tiffanyanne824 on Feb 5, 2023

feiojef

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Tiffanyanne824

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Reply 2 on: Feb 5, 2023
Excellent


olderstudent

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Reply 3 on: Yesterday
Great answer, keep it coming :)

 

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