Reference no: EM131775359

Question - Noir Company produces four versions of its model J17-21 bicycle seat. The four versions have different shapes, but their processing operations and production costs are identical. During July, these costs were incurred:

Direct materials

Leather $25,430

Metal frame 39,180

Bolts 3,010

Materials handling

Labor 8,232

Equipment depreciation 4,410

Electrical power 2,460

Maintenance 5,184

Assembly

Direct labor 13,230

Engineering design

Labor 4,116

Electrical power 1,176

Engineering overhead 7,644

Overhead

Equipment depreciation 7,056

Indirect labor 30,870

Supervision 17,640

Operating supplies 4,410

Electrical power 10,584

Repairs and maintenance 21,168

Building occupancy overhead 52,920

July's output totaled 29,400 units. Each unit requires three machine hours of effort. Materials handling costs are allocated to the products based on direct materials cost, engineering design costs are allocated based on units produced, and overhead is allocated based on machine hours. Assembly costs are allocated based on direct labor hours, which are estimated at 882 for July. During July, Noir Company completed 520 bicycle seats for Job 142. The activity usage for Job 142 was as follows: direct materials, $1,150; direct labor hours, 15.

Required -

1. Compute the following activity cost rates: (a) materials handling cost rate;(b) assembly cost rate, (c) engineering design cost rate, and (d) overhead rate.

2. Prepare a bill of activities for Job 142.

3. Use activity-based costing to compute the job's total cost and product unit cost.