Badger Boards, Inc

Essay

Badger Boards, Inc. BBI) is a manufacturer of circuit boards for a handful of computer manufacturers. The following data pertains to the month of February for the assembly of circuit boards for two of BBI's major customers: MBI, Inc. and CAM, Inc.
● Material costs used and supplied for 14,000 boards for MBI, $80,000; 8,000 boards for CAM $80,000
● Batch setup labor cost used for 20 batches of boards for MBI, $4,000; 8 batches of boards for CAM, $2,400
● Batch setup materials used and supplied for 28 batches, $11,200
● Labor supplied for production of boards for both customers, $56,000; usage based on number of manually assembled parts: 8 for each of the boards for MBI and 16 for each of the boards for CAM
● Facility-level equipment used on a per unit basis for both products, $50,000
● Special packaging and shipping provided on a per unit basis to customers, $21,000 shipping, $14,000 for materials, and $28,000 for labor
● Custodial and security service for the manufacturing area, $1,500
(a) Prepare an activity matrix as follows: In column 1, list all the activities according to their level of usage (i.e., unit-level, batch-level, etc.). In column 2, list the cost driver base for each activity listed in the previous column. In the remaining columns (3 through 10), fill in the appropriate numbers.
Note that columns 3 through 10 are to be labeled as follows: unit-level resources, batch resources, product resources, customer resources, facility resources, total resources supplied, driver base level and cost driver rate.
(b) Does the cost driver rate for unit-level resources have the same meaning as the cost driver rate for a facility level resource? Explain.
(c) Is resource used the same as resource supplied? What is the significance of any difference between the two?