Activity Cost RatesP 3.Noir Company produces four versions of its model J17-21 bicycle seat. Thefour versions have different shapes but their processing operations and productioncosts are identical. During July these costs were incurred:Direct materialsLeather $25430Metal frame 39180Bolts 3010Materials handlingLabor 8232Equipment depreciation 4410Electrical power 2460Maintenance 5184AssemblyDirect labor 13230Engineering designLabor 4116Electrical power 1176Engineering overhead 7644OverheadEquipment depreciation 7056Indirect labor 30870Supervision 17640Operating supplies 4410Electrical power 10584Repairs and maintenance 21168Building occupancy overhead 52920July s output totaled 29400 units. Each unit requires three machine hours ofeffort. Materials handling costs are allocated to the products based on directmaterials cost engineering design costs are allocated based on units producedand overhead is allocated based on machine hours. Assembly costs are allocatedbased on direct labor hours which are estimated at 882 for July.During July Noir Company completed 520 bicycle seats for Job 142. Theactivity usage for Job 142 was as follows: direct materials $1150; direct laborhours 15.Required1. Compute the following activity cost rates: (a) materials handling cost rate;(b) assembly cost rate (c) engineering design cost rate and (d) overhead rate.2. Prepare a bill of activities for Job 142.3. Use activity-based costing to compute the job s total cost and product unit cost.Breakeven AnalysisE 8.Techno Designs produces head covers for golf clubs. The company expects togenerate a profit next year. It anticipates fixed manufacturing costs of $126500and fixed general and administrative expenses of $82030 for the year. Variablemanufacturing and selling costs per set of head covers will be $4.65 and $2.75respectively. Each set will sell for $13.40.1. Compute the breakeven point in sales units.2. Compute the breakeven point in sales dollars.3. If the selling price is increased to $14 per unit and fixed general and administrativeexpenses are cut by $33465 what will the new breakeven point bein units?4. Prepare a graph to illustrate the breakeven point computed in2.
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