**Please show work** Activity-Based And Department Rate Product Costing and Product Cost Distortions Black and Blue...

Department 1 Cutting Department Finishing Department Production Department rate $52.50 per direct labor hour $90.00 per direct labor hour Working notes: Cutting Department Factory overheads Direct Labor hours $315,000 6,000 $52.50 Per Direct Labor hour Finishing Department Factory overheads Direct Labor hours $540,000 6,000 $90.00 Per Direct Labor hour 2 Total factory overhead $390,000 $465,000 Factory overhead per unit $65.00 $77.50 Snowboards Skis Working notes: Snowboards 6,000 4,000 2,000 Skis 6,000 2,000 4,000 Total hours Cutting Department Finishing Department Cost allocation: Cutting Department Finishing Department Total Overheads Total units Cost per unit $210,000 $180,000 $390,000 6,000 $65.00 $105,000 Hours * $52.50 $360,000 Hours * $90 $465,000 6,000 $77.50 Activity 3 Production control Material handling Cutting Department Finishing Department Activity Rate $474 per production run $36 per move $26 per dih $32 per dih Working notes: Activity Cost pool Cost Pool $237,000 $270,000 $507,000 Total Activities 500 7,500 Activity Rate $474 per production run $36 per move Production control Material handling Total Overheads Cutting Department Factory overheads Direct Labor hours $156,000 6,000 $26.00 Per Direct Labor hour Finishing Department Factory overheads Direct Labor hours $192,000 6,000 $32.00 Per Direct Labor hour Snowboards Activity Expected use Based of cost Overhead drivers rates 430 $474 5,000 $36 Cost Assigned Production control Material handling Total Cost assigned Total output Manufacturing cost per unit Skis Expected Activity- use Based Cost of cost Overhea Assigned drivers d rates 70 $474 $33,180 2,500 $36 $90,000 $123,180 6.000 $20.53 $203,820 $180,000 $383,820 6.000 $63.97 Total Activity Activity cost Costs per unit $551,820 $91.97 $303,180 $50.53 4 Snowboards Skis Working notes: Skis 6,000 2,000 4,000 Manufacturing cost - As per ABC method Snowboards Total hours 6,000 Cutting Department 4,000 Finishing Department 2,000 Cost allocation: Cutting Department $104,000 Finishing Department $64,000 Indirect labor $383,820 Total Overheads $551,820 Total units 6,000 Cost per unit $91.97 $52,000 Hours * $26 $128,000 Hours * $32 $123,180 As per above working $303,180 6,000 $50.53 5 The activity-based overhead allocation reveals that Snowboards consume more factory overhead on a per-unit basis than do. The multiple production department rate method does not show this because all factory overhead is assumed to be proportional to direct labor hours. The ABC method separately accounts for the production control and materials handling activity costs. Snowboards have more production control and materials handling activities than do skis. This is because snowboards are made in smaller lots, representing a wide variety of styles. Thus, snowboards have higher activity costs per unit than skis.