Question

Activity Rates Zapato Company produces two types of boots: vaquero and vaquera. There are four activities associated with the two products. Drivers for the four activities are as follows: Vaquero 2,400 2,850 650 Vaquera 5,400 4,650 Cutting hours Assembly hours Inspection hours Rework hours 2,430 The following activity data have been collected: Cutting Assembling $218,400 $125,000 $67,760 $42,250 Inspecting Reworking Required: Calculate the activity rates that would be used to assign costs to each product. If required, round your answers to the nearest cent. Cutting: $ per cutting hour Assembling: si p er assembling hour Inspecting: per inspecting hour Reworking: per reworking hour

Answer 1

Answer to first question in the list (Zapato Company): | Vaquera Total Support Activity cutting hours assembly hours inspection hours rework hours Vaquero 2,400 2,850 650 200 Vaquera 5,400 4,650 2,430 450 7,800 [2400 + 5400] 7,500 [2850 + 4650] 3,080 [650 + 2430] 650 [200 + 450] Therefore, Support Activity Cutting Assembly Inspection Rework Activity Cost Driver cutting hours assembly hours inspection hours rework hours Cost Volume Activity Rate $218,400 7,800 $28 $225,000 7,500 $30 $67,760 3,080 $22 $42,250 650 $65 per cutting hour [Activity Rate = $218400 / 7800 = $28 per cutting hour] per assembly hour [Activity Rate = $225000 / 7500 = $30 per assembly hour] per inspection hour [Activity Rate = $67760 / 3080 = $22 per inspection hour] per rework hour [Activity Rate = $42250 / 650 = $65 per rework hour]