The business of manufacturing basketball shoes
Shambu Shoes is in the business of manufacturing basketball shoes. Accordingly the company uses the six activity cost pools listed below: Activity Cost Pool Activity Measure Maintenance Machine Hours Setups Setup Hours Cutting Supervision Setup Hours Cutting Depreciation Machine Hours Assembly supervision Direct Labor hours Assembly Depreciation Machine Hours The company has already carried out its first stage allocations of costs. The company’s annual costs and activities are summarized as follows: The company has already carried out its first stage allocations of costs. The company’s annual costs and activities are summarized as follows: Activity Cost Pool Est. Overhead Cost Expected Activity Maintenance $150,000 50,000 Machine hours Setups $450,000 300 Setup hours Cutting Supervision $270,000 300 setup hours Cutting Depreciation $160,000 80,000 Machine Hours Assembly Supervision $160,000 32,000 Direct Labor hrs Assembly Depreciation $20,000 80,000 Machine Hours Compute the activity rate for each of the activity cost pools: Show computations a. Maintenance b. Setups c. Cutting supervision d. Cutting depreciation e. Assembly supervision f. Assembly depreciation
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