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Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
Edition 4ISBN: 978-0324380767 Exercise 28
Activity Rates
Pratt Company uses activity-based costing (ABC). Pratt manufactures toy cars using two activities: plastic injection molding and decal application. Pratt's 2011 total budgeted overhead costs for these two activities are $450,000 (80 percent for injection molding and 20 percent for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 2010 are as follows:
Required:
1. Calculate the activity rate for the plastic injection molding activity.
2. Calculate the activity rate for the decal application activity.
Pratt Company uses activity-based costing (ABC). Pratt manufactures toy cars using two activities: plastic injection molding and decal application. Pratt's 2011 total budgeted overhead costs for these two activities are $450,000 (80 percent for injection molding and 20 percent for decal application). Molding overhead costs are driven by the number of pounds of plastic that are molded together. Decal application overhead costs are driven by the number of decals applied to toys. The budgeted activity data for 2010 are as follows:
Required:
1. Calculate the activity rate for the plastic injection molding activity.
2. Calculate the activity rate for the decal application activity.
Explanation
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(1) With the given information, we can d...
Cornerstones of Managerial Accounting 4th Edition by Maryanne Mowen, Don Hansen, Dan Heitger
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