Riverdale Printing Company prints limited edition art books with production runs of 15,000 to 100,000. It has recently adopted an activity-based costing system to assign manufacturing overhead to products. The following data relate to one product, Art of Design, and the ABC cost pools:
| Art of Design: |
|
|
|
|
|
|
Annual production |
|
41,300 |
units |
|
|
Direct material per unit |
|
$37 |
|
|
|
Direct labor per unit |
|
$6 |
|
|
Manufacturing overhead cost pools:
| Cost Pool |
|
Cost |
|
Cost Driver |
|
| Materials ordering |
|
$ 960,000 |
|
Number of purchase orders |
|
| Materials inspection |
|
470,000 |
|
Number of receiving reports |
|
| Equipment setup |
|
2,328,000 |
|
Number of setups |
|
| Quality control |
|
947,200 |
|
Number of inspections |
|
| Other |
|
38,040,000 |
|
Dollar of direct labor cost |
|
| Total manufacturing overhead |
|
$42,745,200 |
|
|
|
Annual activity information related to cost drivers:
| Cost Pool |
|
All Books |
|
Art of Design |
|
| Materials ordering |
|
120,000 |
orders |
|
1,080 |
|
|
| Materials inspection |
|
2,000 |
receiving reports |
|
326 |
|
|
| Equipment setup |
|
120 |
setups |
|
2 |
|
|
| Quality control |
|
5,120 |
inspections |
|
550 |
|
|
| Other |
|
$12,680,000 |
direct labor |
|
$247,800 |
|
Calculate the overhead rate per unit of activity for each of the five cost pools.
| Cost Pool |
|
Cost pool rate |
|
| Materials ordering |
|
$ |
|
| Materials inspection |
|
$ |
|
| Equipment setup |
|
$ |
|
| Quality control |
|
$ |
|
| Other |
|
$ |
|
| Calculate the total overhead assigned to the production of the Art of Design. |
Total overhead assigned |
|
$
Calculate the total overhead assigned to the production of the Art of Design.
| Total overhead assigned |
|
$ |
|