Description
Question 5-38 is a review question that I need to answer so I can complete my assignment. It requires identifying the cost hierarchy, the cost drivers for each category, and calculating budgeted costs. The entire problem and requirements are on the attachment.
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Explanation & Answer
Attached.
5-8 Choosing Cost drivers, activi
1.
Pastel Bags
Budget for Costs and Activities
For the Year Ended February 28, 2017
Direct materials -purses
$319.155
Direct materials- backpacks
454.995
Direct manufacturing labor -purses
99.000
Direct manufacturing labor -backpacks
113.000
Setup
64.000
Shipping
73.000
Design
169.000
Plant utilities and administration
221.000
Total
$1.513.150
2.
Other Budget information follows:
Number of bags
Hours of production
Number of batches
Number of designs
Backpacks
6.175
1.665
120
2
Purses
3.075
2.585
80
2
Total
9.250
4.250
200
4
5-8 Choosing Cost drivers, activity-based costing, activity based managem...