Question: Product-Costing Accuracy, Consumption Ratios, Activity Rates, Activity Costing Tristar Manufacturing produces two types of battery-operated toy soldiers: infantry and special forces. The soldiers are produced by using one continuous process. Four activities have been identified: machining, setups, receiving, and packing. Resource drivers have been used to assign costs to each activity. The overhead activities, their costs, and the other related data are as follows:
Product Machine Hours Setups Receiving orders Packing Orders
Infantry 20,000 300 900 1,600
Special forces 20,000 100 100 800
Costs $80,000 $24,000 $18,000 $30,000
Required: 1. Calculate the total overhead assigned to each product by using only machine hours to calculate a plantwide rate.
2. Calculate consumption ratios for each activity.
3. Calculate a rate for each activity by using the associated driver.
4. Assign the overhead costs to each product by using the activity rates computed in Requirement 3.
5. Conceptual Connection: Comment on the difference between the assignment in Requirement 1 and the activity-based assignment.