Calculate consumption ratios for each activity

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Reference no: EM133085618

Question - Timberwolves Manufacturing produces two (2) types of basketballs: adult size and children size. The basketballs are produced by using one continuous process. Four activities have been identified: machining, set-ups, 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

Set-Ups

Receiving Orders

Packing Orders

Adults

10,000

250

800

1,550

Childrens

10,000

150

200

1,200

Costs

$95,000

$26,000

$16,000

$27,000

Required -

1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plant-wide rate.

2. Calculate consumption ratios for each activity.

3. Calculate a rate for each activity by using the associated driver.

4. Assign the overhead costs to each product by using the activity rates computed in requirement c.

5. Comment on the difference between the assignment in requirement a. and the activity-based assignment.

Reference no: EM133085618

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