accounting

Teldar Paper Company manufactures three products (computer paper, newsprint, and specialty paper) in a continuous production process. Senior management has asked the controller to conduct an activity-based costing study. The controller identified the amount of factory overhead required by the critical activities of the organization as follows:

The activity bases identified for each activity are as follows:

The activity-base usage quantities and units produced for the three products were determined from corporate records and are as follows:

Each product requires 0.8 machine hour per unit.

Required:

If required, round all per unit amounts to the nearest cent.

1.  Determine the activity rate for each activity.

Production

$ per mh

Setup

$ per setup

Moving

$ per move

Shipping

$ per cust. ord.

Product Engineering

$ per test run

2.  Determine the total and per-unit activity cost for all three products.

Total Activity Cost

Activity Cost Per Unit

Computer Paper

$

$

Newsprint

$

$

Specialty Paper

$

$