Problem
Maritime Marine Company has total estimated factory overhead for the year of $903,800, divided into four activities: fabrication, $396,000; assembly, $199,800; setup, $120,000; and inspection, $188,000. Maritime manufactures two types of boats: a speedboat and a bass boat. The activity-base usage quantities for each product by each activity are as follows: Fabrication Assembly Setup Inspection Speedboat 1,100 dlh 1,700 dlh 30 setups 120 inspections Bass boat 1,900 1,000 120 350 3,000 dlh 2,700 dlh 150 setups 470 inspections Each product is budgeted for 100 units of production for the year.
a. Determine the activity rates for each activity.
Fabrication $ per dlh
Assembly $ per dlh
Setup $ per setup
Inspection $ per inspection
b. Determine the factory overhead cost per unit for each product, using activity-based costing. If required, round to the nearest cent.