Continuous production process-total-per-unit activity cost

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Reference no: EM131204328

Alabama Paper Company manufactures three products (computer paper, newsprint, and specialty paper) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows: Activity Activity Cost Pool Production $460,800 Setup 148,400 Moving 91,300 Shipping 108,000 Product Engineering 52,000 Total $860,500 The activity bases identified for each activity are as follows: Activity Activity Base Production Machine hours Setup Number of setups Moving Number of moves Shipping Number of customer orders Product Engineering Number of test runs The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows: Machine Hours Number of Setups Number of Moves Number of Customer Orders Number of Test Runs Units Computer Paper 3,170 100 220 720 40 7,925 Newsprint 2,020 150 330 1,980 250 5,050 Specialty Paper 2,010 150 550 900 110 5,025 Total 7,200 400 1,100 3,600 400 18,000 Each product requires 0.9 machine hour per unit. Required: If required, round all per unit amounts to the nearest cent. 1. Determine the activity rate for each activity. Production $ per machine hour Setup $ per setup Moving $ per move Shipping $ per cust. ord. Product Engineering $ per test run 2. Determine the total and per-unit activity cost for all three products. Total Activity Cost Activity Cost Per Unit Computer Paper $ $ Newsprint $ $ Specialty Paper $ $

Reference no: EM131204328

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