Fly Ball Inc. is a sporting goods company that produces baseballs and baseball mitts that it sells online. Fly Ball has implemented Activity-Based Costing (ABC) and is in the process of compiling a budget for the coming year. Their Manufacturing Overhead (MOH) is comprised of the following costs:
Setups $98,500 (18,000 setups)
Quality Inspections $104,620 (29,300 inspections)
Factory Supervisor Wages $122,480 (8,600 hours)
Fly Ball anticipates the production of 15,482 baseballs and 9,877 baseball mitts. Each product is projected to use company resources in the following manner:
(If required, round calculations to two decimal places.)
a. What is the total MOH cost for the baseballs?
b. What is the total amount of MOH allocated per unit to the baseballs?
c. What is the total MOH cost for the baseball mitts?
d. What is the total amount of MOH allocated per unit to the baseball mitts?
e. Why should Fly Ball seriously consider implementing ABC instead of their current traditional costing system?

Question

Fly Ball Inc. is a sporting goods company that produces baseballs and baseball mitts that it sells online. Fly Ball has implemented Activity-Based Costing (ABC) and is in the process of compiling a budget for the coming year. Their Manufacturing Overhead (MOH) is comprised of the following costs:
Setups $98,500 (18,000 setups)
Quality Inspections $104,620 (29,300 inspections)
Factory Supervisor Wages $122,480 (8,600 hours)
Fly Ball anticipates the production of 15,482 baseballs and 9,877 baseball mitts. Each product is projected to use company resources in the following manner:
  (If required, round calculations to two decimal places.)
a. What is the total MOH cost for the baseballs?
b. What is the total amount of MOH allocated per unit to the baseballs?
c. What is the total MOH cost for the baseball mitts?
d. What is the total amount of MOH allocated per unit to the baseball mitts?
e. Why should Fly Ball seriously consider implementing ABC instead of their current traditional costing system?

Quizplus · Accepted Answer

The Answer of Fly Ball Inc. is a sporting goods company that produces baseballs and baseball mitts that it sells online. Fly Ball has implemented Activity-Based Costing (ABC) and is in the process of compiling a budget for the coming year. Their Manufacturing Overhead (MOH) is comprised of the following costs:
Setups $98,500 (18,000 setups)
Quality Inspections $104,620 (29,300 inspections)
Factory Supervisor Wages $122,480 (8,600 hours)
Fly Ball anticipates the production of 15,482 baseballs and 9,877 baseball mitts. Each product is projected to use company resources in the following manner:
  (If required, round calculations to two decimal places.)
a. What is the total MOH cost for the baseballs?
b. What is the total amount of MOH allocated per unit to the baseballs?
c. What is the total MOH cost for the baseball mitts?
d. What is the total amount of MOH allocated per unit to the baseball mitts?
e. Why should Fly Ball seriously consider implementing ABC instead of their current traditional costing system?