Compute the activity rate for the designing products

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Q1) Surface Inc. has provided the following information from its activity-based costing system:

Activity Cost Pools

Total Cost

Total Activity

Designing products

$387,400

6,510 product design hours

Setting up batches

$52,678

7366 batch set-ups

Assembling products

$25,122

4,018 assembly hours

Compute the activity rate for the "designing products" activity cost pool?

Q2) Rainwater Company allocates the estimated $184,700 of its accounting department costs to its production and sales departments since the accounting department supports the other two departments particularly with regard to payroll and accounts payable functions. The costs will be allocated based on the number of employees using the direct method. Information regarding costs and employees follows:

Department

Employees

Accounting

4

Production

31

Sales

17

How much of the accounting department costs will be allocated to the production?

Q3) Fractal Company has 55 obsolete computers that are carried in inventory at a cost of $9,600. If these computers are upgraded at a cost of $6,700, they could be sold for $18,500. Alternatively, the computers could be sold "as is" for $8,600. What is the net advantage or disadvantage of re-working the computers?

Reference no: EM132800296

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